# Salary or dividend in 2026: what an Estonian OÜ owner keeps, with the numbers What 1,000 euros of company money gives an Estonian OÜ owner in 2026 as a salary, a board member fee or a dividend, why many owners take an 886 euro board fee plus dividends, and when the Tax and Customs Board may see a dividend as pay. Law as of 30 Sept 2026. General information, not advice for your situation. Every owner of an Estonian OÜ asks the same question sooner or later: should I pay myself a salary, a board member fee, or just take dividends? The honest answer is that the dividend leaves you the most cash, and the board fee buys you something a dividend never does: Estonian health insurance. This guide puts real 2026 numbers on that trade, so you can see what each choice costs and decide with your eyes open. **In short** - From 1,000 euros of company money, a resident owner keeps 780 euros as a dividend, about 575 euros as a board fee and about 562 euros as a salary, when the basic exemption is already used. - With the 700 euro monthly exemption still free, the board fee leaves about 729 euros. The dividend stays at 780. - A dividend gives no health insurance and no funded pension, and it does not use the basic exemption of 8,400 euros a year. - The common mix for an owner who lives in Estonia: a board fee of 886 euros a month, which gives health insurance, and the rest as dividends. In 2026 that health insurance costs about 70 to 88 euros a month compared with taking the same money as a dividend. - An owner who is insured another way can take up to 8,400 euros a year as market interest or market rent, with no social tax and, under the unused basic exemption, no income tax, and the rest as dividends. - The Tax and Customs Board can treat pay disguised as a dividend by its real content. An owner who works full time in the company carries that risk. ## What does 1,000 euros of company money give you? The fair way to compare the three routes is to start from the same amount of company money and follow it to your bank account. Here the company spends exactly 1,000 euros on you in each case, and every tax on the way comes out of that amount. The assumptions: you are tax resident in Estonia, you are in the funded pension scheme at the default 2 percent, and the rates are those of 2026. Line A assumes your basic exemption is already used by other income. Line B assumes the full 700 euros of the month is still free and applied to this payment. The salary column assumes that your salary is already at least the monthly base of 886 euros, and these 1,000 euros come on top. On a smaller salary, the company still pays social tax on at least 886 euros, which is 292.38 euros a month ([Social Tax Act § 2(2)](https://www.riigiteataja.ee/en/akt/525052026001#para2)). | | Salary (employment contract) | Board member fee | Dividend | | ------------------------------------------------- | ---------------------------- | ---------------- | ---------- | | Gross amount | 747.38 | 751.88 | 780.00 | | Social tax 33 percent (company) | 246.64 | 248.12 | 0 | | Unemployment insurance 0.8 percent (company) | 5.98 | 0 | 0 | | Corporate income tax 22/78 | 0 | 0 | 220.00 | | Unemployment insurance 1.6 percent (you) | 11.96 | 0 | 0 | | Funded pension 2 percent (stays yours) | 14.95 | 15.04 | 0 | | A. Income tax 22 percent, exemption used | 158.50 | 162.10 | 0 | | **A. Net cash to you** | **561.97** | **574.74** | **780.00** | | B. Income tax 22 percent, 700 euro exemption free | n/a | 8.10 | 0 | | **B. Net cash to you** | n/a | **728.74** | **780.00** | Line B does not apply to a salary: a salary of at least 886 euros already uses the whole 700 euro exemption. So line B applies to the board fee only. The board fee has no minimum base, because [Social Tax Act § 2(2)](https://www.riigiteataja.ee/en/akt/525052026001#para2) names only an employee or an official. The rules behind the table: - Social tax is 33 percent of a salary and of a board fee, paid by the company on top ([Social Tax Act § 2(1)](https://www.riigiteataja.ee/en/akt/525052026001#para2) and [§ 7(1)](https://www.riigiteataja.ee/en/akt/525052026001#para7)). - Unemployment insurance is 1.6 percent from the employee and 0.8 percent from the employer in 2026 ([Tax and Customs Board: tax changes 2026](https://www.emta.ee/uudised/maksumuudatused-2026)). A board member who has no employment contract is not insured and pays none ([Unemployment Insurance Act § 3(2)](https://www.riigiteataja.ee/en/akt/531052026001#para3)). - The company withholds 22 percent income tax after the unemployment and pension contributions and, on your written application, after the basic exemption of at most 700 euros a month ([Income Tax Act § 4(1)](https://www.riigiteataja.ee/en/akt/508052026001#para4), [§ 23(1)](https://www.riigiteataja.ee/en/akt/508052026001#para23) and [§ 42](https://www.riigiteataja.ee/en/akt/508052026001#para42)). - A dividend costs the company 22/78 of the net amount, and a resident person pays no further tax on it ([Income Tax Act § 4(1¹)](https://www.riigiteataja.ee/en/akt/508052026001#para4), [§ 50(1)](https://www.riigiteataja.ee/en/akt/508052026001#para50) and [§ 12(2)](https://www.riigiteataja.ee/en/akt/508052026001#para12)). Read the table this way: even in the best case for pay, when the whole exemption is still free, the dividend leaves about 51 euros more than a board fee, per 1,000 euros. When the exemption is already used, the gap grows to more than 200 euros. On cash alone, the dividend wins every time. The question is what the extra tax on pay buys you, and whether you need it. Try your own figures in the [salary calculator](https://oscaraccountant.com/en/tools/salary-calculator) and the [dividend tax calculator](https://oscaraccountant.com/en/tools/dividend-tax-calculator). ## What do you give up when you take only dividends? A dividend is cheap because it has no social protection at all. An owner who lives on dividends only pays less tax today, but also has nothing that social tax would have paid for. - **Health insurance.** A board member is insured only when the company, or several companies together, pay social tax on at least the monthly base for that month ([Health Insurance Act § 5(2)](https://www.riigiteataja.ee/en/akt/522042026001#para5), clause 4). The base is 886 euros in 2026 ([State Budget Act 2026 § 2](https://www.riigiteataja.ee/akt/118122025022?leiaKehtiv)). A dividend pays no social tax, so it gives no cover. - **The funded pension.** A board fee or a salary carries the 2, 4 or 6 percent contribution to your own pension account ([Funded Pensions Act § 9](https://www.riigiteataja.ee/en/akt/510062025006#para9)). A dividend carries none. - **The basic exemption.** Dividends are not part of your taxable income ([Income Tax Act § 12(2)](https://www.riigiteataja.ee/en/akt/508052026001#para12)), so the 8,400 euro exemption has nothing to apply to. Unused, it is worth up to 1,848 euros a year (22 percent of 8,400). - **The deduction for voluntary pension savings.** You can deduct payments into a voluntary pension fund or a supplementary pension insurance, up to 15 percent of your taxable income and at most 6,000 euros a year ([Income Tax Act § 28(2)](https://www.riigiteataja.ee/en/akt/508052026001#para28)). A dividend is not taxable income, so it gives no room for this deduction. A board fee does. ## Why do many owners take an 886 euro board fee and the rest as dividends? Because it buys health insurance at the lowest price the law allows. A board fee has no minimum social tax and no unemployment insurance, so you can set it exactly at the level that gives cover and stop there. Everything above that level goes out as a dividend, which is the cheapest route for the rest. A board fee of 886 euros a month in 2026, with a 2 percent pension rate and the full 700 euro exemption applied to it, compared with the same company money paid as a dividend: | | Board fee of 886 euros a month | The same money as a dividend | | -------------------------- | ------------------------------------------------- | ---------------------------- | | Company money a month | 1,178.38 | 1,178.38 | | Social tax 33 percent | 292.38 | 0 | | Corporate income tax 22/78 | 0 | 259.24 | | Funded pension 2 percent | 17.72 | 0 | | Income tax 22 percent | 37.02 | 0 | | **Net cash a month** | **831.26** | **919.14** | | Company money a year | 14,140.56 | 14,140.56 | | **Net cash a year** | **9,975.12**, plus 212.64 in your pension account | **11,029.64** | | Health insurance | yes | no | The difference is 87.88 euros a month, or 70.16 euros if you count the pension contribution as your own money. That is the price of Estonian health insurance through your own company in 2026. Over a year it is about 842 to 1,055 euros. The rules that make this work: - A board fee carries no minimum social tax. The company pays social tax on the actual fee only ([Social Tax Act § 2(1)](https://www.riigiteataja.ee/en/akt/525052026001#para2), clause 4). The minimum of [§ 2(2)](https://www.riigiteataja.ee/en/akt/525052026001#para2) applies to employees. - A fee below 886 euros is lawful, but it gives no health insurance for that month ([Health Insurance Act § 5(2)](https://www.riigiteataja.ee/en/akt/522042026001#para5), clause 4). - The month of payment counts. A fee for March paid on 3 April counts for April. See [founder remuneration](https://oscaraccountant.com/en/guides/founder-remuneration#how-and-when-is-the-board-fee-declared) for the TSD and the start of the cover. - An OÜ pays dividends only from profit shown in an approved annual report, so the dividend part comes once a year, not monthly ([Commercial Code § 157(1)](https://www.riigiteataja.ee/en/akt/527022024004#para157)). See [paying a dividend](https://oscaraccountant.com/en/guides/dividends-mechanics#interim-dividend). Note on the base: it's set again in each year's state budget, and by law it cannot be lower than the minimum wage in force on 1 July of the year before. The minimum wage increased to 946 euros on 01.04.2026, so expect the base for 2027 to be at least that. Check the new figure in January and raise a round board fee then. The base rule is in [Social Tax Act § 2¹](https://www.riigiteataja.ee/en/akt/525052026001#para2b1), and the minimum wage in the [Government regulation](https://www.riigiteataja.ee/akt/124032026005). We had not found the 2027 figure when this guide was written. The other way to get cover is a voluntary contract with the Health Insurance Fund, open to a person who lives in Estonia ([Health Insurance Act § 22](https://www.riigiteataja.ee/en/akt/522042026001#para22)). You pay it from your own pocket, and it adds nothing to your funded pension. We have not confirmed its price for 2026, so compare the current price with the yearly cost of the board fee route above before you choose it. ## What if you already have health insurance another way? Then the board fee buys you something you already have, and the numbers change. This is the case if you also work under an employment contract elsewhere, if you're a student, if you receive a state pension from Estonia, or if you're under 19. In that case the best use of your basic exemption is income that carries no social tax at all. The law treats these people as insured without a board fee ([Health Insurance Act § 5(2)](https://www.riigiteataja.ee/en/akt/522042026001#para5), clause 1, and [§ 5(4)](https://www.riigiteataja.ee/en/akt/522042026001#para5)). Income that carries income tax but no social tax: - **Interest on a real loan you gave the company**, at a market rate and under a written agreement. The company withholds 22 percent ([Income Tax Act § 41](https://www.riigiteataja.ee/en/akt/508052026001#para41), clause 4). - **Rent for an asset or a room you let to the company**, at market rent. The company withholds 22 percent ([Income Tax Act § 41](https://www.riigiteataja.ee/en/akt/508052026001#para41), clause 7). - **Licence fees** for intellectual property you own and license to the company, at market terms (same clause 7). A price above market between you and your company is taxed as if it were at market value ([Income Tax Act § 50(4)](https://www.riigiteataja.ee/en/akt/508052026001#para50)). Keep the loan agreement, the lease and the evidence of the market rate or rent. The same yearly company money of 14,140.56 euros, for an owner insured another way: | Mix | Net cash a year | | ------------------------------------------------------------------------- | --------------- | | All as a dividend | 11,029.64 | | 8,400 euros of market interest or rent, the rest (5,740.56) as a dividend | 12,877.64 | The second mix is 1,848 euros a year better. The company withholds 22 percent from each interest or rent payment. If your exemption was not used on other income, you get that tax back through your annual income tax return, due by 30 April of the next year ([Income Tax Act § 44(1)](https://www.riigiteataja.ee/en/akt/508052026001#para44)). Two limits for a room in your home: - **No 20 percent deduction.** The 20 percent deduction for rental costs applies to a residential lease only ([Income Tax Act § 39¹](https://www.riigiteataja.ee/en/akt/508052026001#para39b1)). A room used as an office is business premises, not a dwelling ([Law of Obligations Act § 272(1)](https://www.riigiteataja.ee/en/akt/510092026001#para272)), so the full 22 percent applies. - **The sale of your home later.** The gain on the sale of your own home is tax-free, but in proportion to the floor area used as your home only. The part used for another purpose, such as an office let to your company, can be taxed ([Income Tax Act § 15(5) and (6)](https://www.riigiteataja.ee/en/akt/508052026001#para15)). ## Can the Tax and Customs Board treat a dividend as pay? It can, if the dividend is really pay for work. There's no law that forces a company to pay its board member, and a dividend in proportion to the shares is a legal option. The risk is smaller than many owners fear, but it's real for one group: owners who do the income-earning work of the company full time and take almost nothing as pay. - A transaction made to avoid tax is taxed by its real economic content ([Taxation Act § 84](https://www.riigiteataja.ee/en/akt/511082026003#para84)). - A sham transaction is disregarded, and a hidden one is taxed ([Taxation Act § 83(4)](https://www.riigiteataja.ee/en/akt/511082026003#para83)). - If a payment is reclassified as pay, the company owes social tax, the withheld income tax and interest. Tax practitioners report that the Tax and Customs Board takes the position that an owner who does the company's income-earning work full time should be paid at least the minimum wage, which is 946 euros a month from 01.04.2026 ([Government regulation](https://www.riigiteataja.ee/akt/124032026005)). We have not found a text of the Board that states this position. No statute sets that split, and we have not found a Supreme Court ruling that settles it. Treat it as an open risk, not as a fixed rule. In practice, a passive owner, or an owner whose only role is the board, can take dividends with little risk. An owner who works full time under an employment contract already pays at least the minimum social tax on the salary, so the question doesn't arise. The owner who should think twice is the one who works full time in the business, has no employment contract and pays out almost everything as dividends. More on the signs that point to pay in [corporate income tax on distributions](https://oscaraccountant.com/en/guides/cit-distribution-tax#can-the-tax-board-treat-a-dividend-as-pay). ## Which mix fits which owner? | Your situation | A common mix | | --------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | You live in Estonia and need health insurance | A board fee of 886 euros a month in 2026, the rest as dividends once a year | | You are insured another way | Up to 8,400 euros a year of market interest, rent or licence fees, the rest as dividends | | You work full time in the company | At least the minimum wage as pay, the rest as dividends | | You only hold shares and do not work in the company | Dividends | | You live abroad | Read [founder remuneration](https://oscaraccountant.com/en/guides/founder-remuneration#is-a-board-fee-taxed-in-estonia-when-you-live-abroad) first: a board fee is taxed in Estonia wherever you live, and it gives no Estonian health insurance if you live outside Estonia | ## What Oscar does Oscar runs the payroll of your board fee, applies the basic exemption when you give your application, and files the salary tax declaration (TSD) every month. When you pay a dividend, Oscar records it and declares it with its tax on the TSD of the month of payment. An accountant reviews the books. Oscar shows you what each choice costs, but the mix is your decision. General information, not advice for your situation. The law as in force on 30.09.2026. ## Let Oscar do the work Oscar runs your payroll and files the salary tax declaration (TSD) for you. [Get started](https://oscaraccountant.com/signup) ## Sources - [Income Tax Act § 4](https://www.riigiteataja.ee/en/akt/508052026001#para4) - [Income Tax Act § 12](https://www.riigiteataja.ee/en/akt/508052026001#para12) - [Income Tax Act § 13](https://www.riigiteataja.ee/en/akt/508052026001#para13) - [Income Tax Act § 15](https://www.riigiteataja.ee/en/akt/508052026001#para15) - [Income Tax Act § 23](https://www.riigiteataja.ee/en/akt/508052026001#para23) - [Income Tax Act § 28](https://www.riigiteataja.ee/en/akt/508052026001#para28) - [Income Tax Act § 39¹](https://www.riigiteataja.ee/en/akt/508052026001#para39b1) - [Income Tax Act § 41](https://www.riigiteataja.ee/en/akt/508052026001#para41) - [Income Tax Act § 42](https://www.riigiteataja.ee/en/akt/508052026001#para42) - [Income Tax Act § 44](https://www.riigiteataja.ee/en/akt/508052026001#para44) - [Income Tax Act § 50](https://www.riigiteataja.ee/en/akt/508052026001#para50) - [Social Tax Act § 2](https://www.riigiteataja.ee/en/akt/525052026001#para2) - [Social Tax Act § 7](https://www.riigiteataja.ee/en/akt/525052026001#para7) - [Health Insurance Act § 5](https://www.riigiteataja.ee/en/akt/522042026001#para5) - [Health Insurance Act § 22](https://www.riigiteataja.ee/en/akt/522042026001#para22) - [Unemployment Insurance Act § 3](https://www.riigiteataja.ee/en/akt/531052026001#para3) - [Funded Pensions Act § 9](https://www.riigiteataja.ee/en/akt/510062025006#para9) - [Commercial Code § 157](https://www.riigiteataja.ee/en/akt/527022024004#para157) - [Law of Obligations Act § 272](https://www.riigiteataja.ee/en/akt/510092026001#para272) - [Taxation Act § 83](https://www.riigiteataja.ee/en/akt/511082026003#para83) - [Taxation Act § 84](https://www.riigiteataja.ee/en/akt/511082026003#para84) - [State Budget Act 2026 § 2 (monthly social tax rate)](https://www.riigiteataja.ee/akt/118122025022?leiaKehtiv) - [Government regulation on the minimum wage from 01.04.2026](https://www.riigiteataja.ee/akt/124032026005) - [Tax and Customs Board: tax changes 2026](https://www.emta.ee/uudised/maksumuudatused-2026) ## Related pages - [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. - [Paying a dividend from an Estonian OÜ: the steps, the limits and the TSD](https://oscaraccountant.com/en/guides/dividends-mechanics): The steps to pay a lawful dividend from an OÜ, how much you may pay, instalments, dividends in kind, and how to declare it on the TSD. - [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. - [Tax-free payments to a board member of an Estonian OÜ in 2026](https://oscaraccountant.com/en/guides/tax-free-payments-board-member): What an Estonian OÜ can pay its owner as a board member with no income tax and no social tax in 2026: car compensation, per diem and trip costs, health and sport, home office, equipment and training, and what is not tax-free. - [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. - [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. Reviewed on 10 Nov 2026. Law as of 30 Sept 2026. 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