Income tax

One flat rate, no brackets

Income tax (tulumaks) on employment income in Estonia is charged at a single flat rate of 22%. There is no bracket table, no progressive schedule and no municipal or local income tax layered on top — the same rate applies to the first euro of taxable income and to the last. That is what makes the Estonian calculation short: once you know the base, the tax is simply 22% of it. Every figure on this page is the rates in force for 2026, shown to explain the mechanism, not an official value to rely on.

What the rate is charged on: the withholding base

The rate is not applied to your gross salary. It is applied to your taxable income — the gross reduced by three things, in order. First the employee unemployment-insurance contribution (1,6%) comes off. Then your funded-pension contribution (the II pillar), if you pay one, comes off. Finally the basic exemption is subtracted. Income tax of 22% is charged on whatever remains; if the deductions and the exemption together exceed the gross, the base is zero and no tax is withheld. Your employer runs this withholding on every payslip, so the amount that reaches your account is already net.

The basic exemption (maksuvaba tulu) — now flat

Before the tax is worked out, the basic exemption (maksuvaba tulu) is removed from the base — 700,00 € per month for a standard resident employee. From 2026 this is the reform that matters most: the basic exemption is the same amount for everyone and no longer depends on income. The earlier income-dependent taper — the so-called tax hump (maksuküür), which shrank the exemption as pay rose — has been abolished, and this calculator never models it. At old-age pension age a higher exemption of 776,00 € per month applies instead.

The one-employer rule (avaldus)

The exemption is not automatic. It applies only where you have filed a written application (avaldus) asking your employer to take it into account, and only at one employer at a time. If you hold a second job, the second employer withholds 22% on the full base with no exemption applied — which is why the calculator carries a toggle to switch the exemption off and show that second-employer case.

What changed for 2026, and what this page does not cover

Two announced changes never took effect: the further rise of the rate to a higher level, and a temporary security tax (julgeolekumaks), were both repealed before they applied. For 2026 the withholding rate is the flat 22% shown here. This overview is limited to the monthly calculation for standard resident employment; it does not cover self-employment income, non-residents (who cannot apply the monthly exemption at source), or fringe benefits, which are taxed on the employer side. All rates and amounts are those in force for 2026. The result is an estimate — for an official amount, check your payslip or the Tax and Customs Board.