Fringe benefit tax calculator

Work out the tax on a fringe benefit in 2026: income tax 22/78 and social tax 33%. Enter the benefit value, or the engine power for a company car.

A fringe benefit is a benefit with a monetary value that an employer gives an employee – e.g. private use of an employer's car, a phone, a gift, employer-paid housing or a loan below market rate. The employer pays the tax on a fringe benefit, not the employee.

How is the tax calculated?

Income tax = benefit value × 22/78 (2026 rate 22%).
Social tax = (benefit value + income tax) × 33%.

For example, on a €100 fringe benefit the income tax is €28.21 and social tax €42.31, total tax €70.52 and total employer cost €170.52.

Employer's car

The private-use fringe benefit value depends on engine power: €1.96 per kW per month, or €1.47 per kW for a car over 5 years old – actual mileage is not considered. If the car is used only for work trips and a logbook is kept, no fringe benefit arises.

Tax-free benefits

Some benefits are tax-free up to a limit, e.g. an employee's health and sports expenses up to €400 per year (from 2026 without a quarterly limit), occupational health costs and business-trip daily allowance. Fringe benefits are declared in Annex 4 of form TSD by the 10th of the following month.

Frequently asked questions

How are fringe benefits taxed in Estonia?

The employer pays the tax on a fringe benefit: income tax 22/78 on the benefit value and social tax 33% on the sum of the benefit value and the income tax. For example, on a €100 benefit the income tax is ≈ €28.21 and social tax ≈ €42.31, totalling ≈ €70.52.

How is the company car fringe benefit calculated?

The fringe benefit value for private use of an employer's car depends on engine power: €1.96 per kW per month, or €1.47 per kW for a car over 5 years old. For example, a new 150 kW car has a benefit value of €294 per month, on which the employer pays income and social tax.

Are health and sports expenses a fringe benefit?

An employer may reimburse an employee's health and sports expenses tax-free up to €400 per employee per year – this is not a taxable fringe benefit. The part above €400 is taxed as a fringe benefit. From 2026 the earlier €100 quarterly limit was removed, so the annual amount is more flexible.

Sources

Based on official sources · last reviewed 2026-07-17.