Salary Calculator
The entered amount is below the social tax minimum – the minimum has been applied.
Note! This is an approximate calculation using 2026 tax rates. The actual net amount depends on whether the basic exemption is applied and on other deductions.
Convert gross salary to net or net to gross. The calculator uses the tax rates valid in Estonia in 2026 and also shows the total employer cost.
How is net salary calculated from gross?
Gross salary is the amount agreed between the employer and employee in the employment contract. Net salary, or “take-home pay”, is what reaches the employee’s bank account after taxes and mandatory contributions are withheld. The difference can be several hundred euros per month, which is why it is worth running the calculation before every salary negotiation or new hire.
In Estonia, three employee-side components are withheld from gross salary: unemployment insurance, the mandatory funded pension contribution and income tax. In addition, the employer separately pays social tax and its share of unemployment insurance on top of the gross salary – these do not reduce the employee’s net salary but make up the employer’s real cost.
2026 tax rates in Estonia
The following rates apply from 1 January 2026:
- Income tax – 22%. The previously planned increase to 24% was cancelled, so the rate stays the same as in 2025.
- General basic exemption – €700/month (€8,400/year). The previous graduated system was abolished: the basic exemption is now the same for all employees, regardless of income. At retirement age the basic exemption is €776/month.
- Unemployment insurance – employee 1.6%, employer 0.8%.
- Funded pension (2nd pillar) – 2%, 4% or 6%. The standard rate is 2%, but by application an employee can pay 4% or 6%. If the person has not joined the 2nd pillar, this contribution does not apply.
- Social tax – 33% (paid by the employer).
Example: €2,000 gross salary
Consider an employee with a gross salary of €2,000 per month, paying the standard 2% funded pension and applying the €700 basic exemption:
- Unemployment insurance: 2,000 × 1.6% = €32
- Funded pension: 2,000 × 2% = €40
- Taxable income: 2,000 − 32 − 40 − 700 = €1,228
- Income tax: 1,228 × 22% = €270.16
- Net salary: €1,657.84
For the employer, social tax (2,000 × 33% = €660) and the employer’s unemployment insurance (2,000 × 0.8% = €16) are added on top. The employer’s real total cost is therefore €2,676 – roughly €1,000 more than the employee receives.
Why does the total employer cost matter?
If you are considering buying a business or building a business plan, labour cost is usually one of the largest expense items. Instead of gross salary, you should budget the total employer cost, which is typically about 1.34 times the gross. This number directly affects company profit and therefore its value – for a clearer picture of company value use our company valuation calculator.
Frequently asked questions
Gross salary is the amount agreed in the employment contract before taxes are withheld. Net salary is the amount that reaches the employee’s account after income tax, unemployment insurance and funded pension are withheld. The total employer cost is higher than gross, because social tax and the employer’s unemployment insurance are added.
No. The €700/month basic exemption is applied by the employer only if the employee has submitted an application. Typically the application is submitted to one employer. If you have several employers, apply the basic exemption with only one to avoid having to pay additional income tax at year-end.
The standard mandatory funded pension (2nd pillar) rate is 2% of gross salary. From 2025, an employee can raise their contribution to 4% or 6% by application. If a person has not joined the 2nd pillar, this contribution is not withheld.
The income tax rate in 2026 is 22%. The previously planned increase to 24% was cancelled. Income tax is calculated on taxable income, which is gross salary minus unemployment insurance, funded pension and the basic exemption.
The total employer cost consists of gross salary, social tax (33%) and the employer’s unemployment insurance (0.8%). For example, with a €2,000 gross salary the total employer cost is €2,676. This is an important figure for budgeting and for company valuation.
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