Estonian tax changes 2026 and 2027
In 2026 the income-based taper of the basic exemption disappeared – it is a flat €700 per month for everyone –, the planned income tax rise was cancelled and unemployment benefits got a new system. Under current decisions payroll taxes stay the same in 2027; the minimum wage and benefit caps are still open. This overview sums up the key changes.
What changes in 2027? (as of 20 Oct 2026)
| Indicator | 2026 | 2027 |
|---|---|---|
| Income tax | 22% | 22% – no change planned |
| Basic exemption | €700/month | €700/month – no change planned |
| Social tax | 33% | 33% |
| Unemployment insurance | 1.6% / 0.8% | 1.6% / 0.8% (government confirmed for 2027–2030) |
| VAT | 24% / 13% / 9% | rates unchanged |
| Minimum wage | €946/month | open – negotiations began in October 2026 |
| Social tax monthly base | €886 | set by the 2027 state budget |
| Parental / sick pay cap | €3,806.10 / €126.87 | set at the end of the year |
| Pensions | — | forecast +5.1% (indexed in April) |
Is the salary calculator valid in 2027?
Yes. Because income tax (22%), the basic exemption (€700 per month), unemployment insurance (1.6% and 0.8%) and social tax (33%) stay the same under current decisions, the gross-to-net calculation in 2027 is the same as in 2026. Use the salary calculator. If the state budget or the minimum wage decision changes anything, we update the calculators straight away.Key figures 2026
| Indicator | 2026 |
|---|---|
| Income tax | 22% (the rise to 24% was cancelled) |
| Basic exemption | €700/month for everyone (taper abolished) |
| VAT | 24% (in force since 1 July 2025) |
| Minimum wage | €946/month from 1 April 2026 (previously €886) |
| Unemployment insurance | 1.6% employee / 0.8% employer |
| Sick pay daily cap | €126.87 |
| Parental benefit cap | €3,806.10/month |
| Social tax monthly base | €886 (minimum obligation €292.38/month) |
The tax hump is gone – what does it mean?
Previously the basic exemption shrank as income grew (the "tax hump"); from 2026 it is a flat €700 per month, i.e. €8,400 per year, for everyone. Middle and higher earners keep more as a result. The salary calculator shows the exact effect on your pay; the basic exemption calculator explains the details.Unemployment benefit reform
From 2026 the unemployment insurance benefit is 60% of the average wage for the first 100 days and 40% from day 101; the duration is 180, 210 or 300 days depending on the insurance record. Without an income-based entitlement a base rate of €443 per month applies. Work out your benefit with the calculator.Related calculators
- Salary calculator (Estonia)
- Basic exemption calculator
- Sole proprietor (FIE) tax calculator
- VAT calculator (Estonia)
- Unemployment insurance benefit calculator (Estonia)
Read more
- Salary and taxes in Estonia 2026
- Income tax in Estonia 2026
- Funded pension (2nd pillar) 2026
- Average salary in Estonia 2026
Source: Government – 2027 state budget bill ↗ · Source: ERR – unemployment insurance rates 2027–2030 ↗ · Source: Estonian Tax Board – tax changes 2026 ↗ · Source: Ministry of Finance – the tax hump disappears in 2026 ↗ · Source: Ministry of Economic Affairs – unemployment benefit reform ↗