Estonian tax changes 2026
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. This overview sums up the key changes.
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: Estonian Tax Board – tax changes 2026 ↗ · Source: Ministry of Finance – the tax hump disappears in 2026 ↗ · Source: Ministry of Economic Affairs – unemployment benefit reform ↗