Tallinn University of Technology

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    Taxes and benefits

    Taxes and benefits

    With the 20% income tax, you can actually keep the larger portion of your salary to yourself (it’s quite a different story in the neighbouring countries of Finland and Sweden, for example).

    You’ll also have deductible expenses, such as:

    • housing loan interest,
    • training expenses,
    • gifts and donations,
    • pension contributions,
    • deductions for children,
    • unemployment insurance contributions.

    Amount of annual tax-free income for 2019 can be calculated using the calculator.

    In Estonia, taxes are withheld from your gross salary by your employer on a monthly basis. This means you don’t have to make additional payments or file monthly tax returns.

    Additionally, your employer is also obliged to pay the social tax of 33% from your gross salary. This is the tax for the employer: it is based on your actual gross income and not subtracted from your salary.

    Labour taxes

    In Estonia, the employer pays all the taxes on behalf of the employee. This leaves you with your net salary and nothing to worry about.

    Social Services

    In Estonia, social services are provided by a governmental agency – the Social Insurance Board  – and two public legal bodies – the Health Insurance Fund and the Unemployment Insurance Fund.

    Some social services (like transportation allowance, kindergarten and school allowance) are also provided by local government units.

    Pension System

    Estonia has a three-pillared pension system consisting of the state pension, the mandatory funded pension and supplementary funded pensions. 

    To receive the old age or disability pension, apply for it via the Social Insurance Board. You will be eligible for the Estonian retirement pension when you have proof of at least one year of pensionable service in the EU member states, Norway, Iceland, Liechtenstein or Switzerland. 

    Estonia also has separate international contracts with Latvia, Lithuania, Finland, Ukraine, Canada, and Russia.

    More information:

    Application form for determination of residency

    Estonian Tax and Customs Board

    Taxation of income of non-residents