About taxes in Estonia

Estonia famously runs a flat income tax — 22% on most income in 2026 (a previously planned rise to 24% for 2026 was cancelled by the Riigikogu in December 2025). The basic exemption ("maksuvaba tulu") is a flat €8,400/year (€700/month) for working-age people from 1 January 2026 — the old income-dependent taper between €14,400 and €25,200 has been abolished. Employee social contributions are unusually light by European standards: unemployment insurance is 1.6% of gross salary, and the funded pension (II pillar) is 2% — though II pillar contributions are voluntary since 2021's reform (you can opt out and reclaim past contributions). Employer-side social tax is 33% of gross, but this does not appear on your payslip. Health insurance is funded entirely from employer-paid social tax — no employee deduction. Estonia has no church tax at the national level. Cross-border digital nomads benefit from Estonia's e-Residency programme, but e-Residents are not Estonian tax residents unless they physically meet the residency test. The tax year is the calendar year and returns are pre-filled by the Tax and Customs Board (EMTA), making filing famously quick.