# Income tax (tulumaks)

What tulumaks is in Estonia: 22 percent on personal income, 22/78 on the profit a company distributes, how it is withheld and when it is paid.

Law as of 30 Sept 2026. General information, not advice for your situation.

**Tulumaks** is the Estonian word for **income tax**. One act, the Income Tax Act (_Tulumaksuseadus_, TuMS), taxes both people and companies. A person pays 22 percent on income such as a salary, after the [basic exemption](https://oscaraccountant.com/en/glossary/basic-exemption). A resident company pays no tax on the profit it keeps: it pays income tax only when it distributes profit, for example as a dividend.

## Key facts

| Fact                           | Value                                                                 | Source                                                                      |
| ------------------------------ | --------------------------------------------------------------------- | --------------------------------------------------------------------------- |
| Rate for individuals           | 22 percent in 2026; the published text for 2027 keeps it              | [TuMS § 4 (1)](https://www.riigiteataja.ee/en/akt/508052026001)             |
| Rate on a company distribution | 22/78 of the net amount, for payments from 01.01.2025 (20/80 before)  | [TuMS § 4 (1^1), § 50 (1)](https://www.riigiteataja.ee/en/akt/508052026001) |
| Basic exemption                | 700 euros a month, 8 400 euros a year, from 01.01.2026                | [TuMS § 23 (1)](https://www.riigiteataja.ee/en/akt/508052026001)            |
| Who withholds                  | The employer withholds the tax from a salary or a board member fee    | [TuMS § 41, § 43 (1)](https://www.riigiteataja.ee/en/akt/508052026001)      |
| Return and payment             | On the monthly [TSD](https://oscaraccountant.com/en/glossary/tsd), by the 10th of the next month | [TuMS § 40 (4), (5); § 54](https://www.riigiteataja.ee/en/akt/508052026001) |

## Income tax on a salary

The employer withholds 22 percent from the gross salary. It first takes off the employee's unemployment insurance premium, the funded pension payment, and the basic exemption the employee asked for in writing ([TuMS § 42 (1), (5), (6)](https://www.riigiteataja.ee/en/akt/508052026001)). The [salary calculator](https://oscaraccountant.com/en/tools/salary-calculator) shows each step.

## Income tax on company profit

A resident company pays income tax when it distributes profit, in the month of the payment. Retained profit is not taxed, and there is no annual corporate tax return on accounting profit ([TuMS § 50 (1)](https://www.riigiteataja.ee/en/akt/508052026001)). The tax is 22/78 of the net amount paid out: a net dividend of 7 800 euros carries 2 200 euros of tax. The same 22/78 rate applies to fringe benefits, gifts and non-business expenses. The [dividend tax calculator](https://oscaraccountant.com/en/tools/dividend-tax-calculator) does the sum, and the guide on [corporate income tax on distributions](https://oscaraccountant.com/en/guides/cit-distribution-tax) explains the model.

## Rate changes

The rise from 20 to 22 percent took effect on 01.01.2025 ([act of 20.06.2023](https://www.riigiteataja.ee/akt/130062023107)). A rise to 24 percent from 2026 was adopted in June 2025 and cancelled in December 2025 before it took effect ([act of 03.12.2025](https://www.riigiteataja.ee/akt/118122025003)). The planned 2 percent security tax never applied: the act of 18.06.2025 repealed it ([RT I, 08.07.2025, 1](https://www.riigiteataja.ee/akt/108072025001)). Every rate by year is on [Estonian tax rates](https://oscaraccountant.com/en/guides/estonian-tax-rates).

General information, not advice for your situation. The law as in force on 30.09.2026.

## Let Oscar do the work

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## Sources

- [Income Tax Act (Tulumaksuseadus) § 4, § 23, § 40, § 42, § 50, § 54](https://www.riigiteataja.ee/en/akt/508052026001)
- [Income Tax Act (Tulumaksuseadus), Estonian consolidated text](https://www.riigiteataja.ee/akt/129042026004)
- [Act of 03.12.2025 that cancelled the rise to 24 percent (RT I, 18.12.2025, 3)](https://www.riigiteataja.ee/akt/118122025003)
- [Act of 20.06.2023 that set 22 percent and 22/78 from 2025 (RT I, 30.06.2023, 107)](https://www.riigiteataja.ee/akt/130062023107)
- [Act of 18.06.2025 that repealed the Security Tax Act (RT I, 08.07.2025, 1)](https://www.riigiteataja.ee/akt/108072025001)
- [EMTA: Tax rates](https://www.emta.ee/en/business-client/taxes-and-payment/income-and-social-taxes/tax-rates)
- [EMTA: Tax changes 2026 (Estonian)](https://www.emta.ee/uudised/maksumuudatused-2026)

## Related pages

- [Basic exemption (maksuvaba tulu)](https://oscaraccountant.com/en/glossary/basic-exemption): What maksuvaba tulu is: the tax-free part of a person's income in Estonia, 700 euros a month from 01.01.2026, and how an employer applies it.
- [Social tax (sotsiaalmaks)](https://oscaraccountant.com/en/glossary/social-tax): What sotsiaalmaks is: the 33 percent tax an Estonian employer pays on top of pay, the 2026 minimum base of 886 euros, and how it funds health insurance and pension.
- [TSD (income and social tax return)](https://oscaraccountant.com/en/glossary/tsd): What the TSD is: the monthly Estonian return for income tax, social tax, unemployment insurance and the funded pension, due on the 10th of the next month.
- [Estonian tax rates 2024 to 2026](https://oscaraccountant.com/en/guides/estonian-tax-rates): Every Estonian business tax rate on one page, by year: corporate and personal income tax, basic exemption, social tax, unemployment insurance, pension, VAT.
- [Corporate income tax in Estonia: tax on distributed profit](https://oscaraccountant.com/en/guides/cit-distribution-tax): How Estonia taxes company profit only when it is paid out: the 22/78 rate in 2026, how to compute it, losses, non-resident owners, and salary versus dividend.
- [Paying yourself as the founder of an Estonian OÜ: board fee, salary and social tax](https://oscaraccountant.com/en/guides/founder-remuneration): How the owner-manager of an Estonian OÜ is paid: the board member fee, a salary, the minimum social tax, health insurance, the basic exemption and the TSD.
- [Estonian salary calculator](https://oscaraccountant.com/en/tools/salary-calculator): Work out the net pay and the employer's total cost of an Estonian salary or board member fee, with income tax, the basic exemption, social tax, unemployment insurance and the funded pension.
- [Estonian dividend tax calculator](https://oscaraccountant.com/en/tools/dividend-tax-calculator): Work out the corporate income tax on a dividend from an Estonian company, from the net or the total amount, with the rate of the payment date and the TSD due date.

Reviewed on 10 Oct 2026. Law as of 30 Sept 2026. General information, not advice for your situation.

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