Estonia Salary Calculator 2026 — Gross to Net
Calculate your Estonian take-home pay after the flat 22% income tax. Supports employee and OÜ dividend model modes.
Frequently Asked Questions
How is income tax calculated in Estonia?
Estonia uses a flat 22% income tax rate from 2026 (increased from 20%). Employees benefit from a universal basic exemption of €8 400/year — income up to this amount is completely tax-free. The 22% rate applies to income above the basic exemption. Estonia's tax system is known for its simplicity and digital efficiency.
What employee social contributions apply in Estonia?
Employees pay two contributions from their gross salary: 1.6% unemployment insurance (töötuskindlustus) and 2% towards the funded pension (II sammas / II pillar). The employer separately pays 33% social tax (sotsiaalmaks) on top of your gross salary to cover pension and health insurance — this does not come out of your net pay.
What is the OÜ dividend model in Estonia?
Estonian OÜ (osaühing — limited liability company) owners can distribute profits as dividends. The company pays 22% corporate income tax (tulumaks) on distributed profit, calculated as gross × (22/78). The owner receives the net dividend with no additional personal income tax. This creates an effective 22% rate on the gross distributed amount.
Why do Estonian companies only pay CIT when distributing dividends?
Estonia uses a unique distributed profit taxation model: corporate income tax is only due when profits are distributed, not when earned. Retained profits in the company are tax-free. This encourages reinvestment and is a major reason Estonia ranks highly in international tax competitiveness indices.
Can I compare employee vs OÜ dividend model for my income?
Yes — use the Employee mode for standard employment income and the B2B mode for the OÜ dividend model. Note that the OÜ model does not include social security contributions for the owner (owners often pay a minimum salary separately to gain social benefits). The pure dividend model shows only the CIT cost of distribution.
What is the basic exemption (maksuvaba tulu) in Estonia?
From 2026, the universal basic exemption is €8 400/year (€700/month) for all taxpayers regardless of income level. Previously, the exemption phased out at higher incomes. The new flat exemption simplifies calculation and gives a consistent tax-free threshold to all employees.