Estonia HR and payroll glossary

Maksuvaba tulu Basic exemption (tax-free income)

maksuvaba tulu

From 2026 a flat €700 a month (€8,400 a year) for everyone below pensionable age, no longer reduced as income rises. One employer applies it on the employee's written application; otherwise it is reclaimed in the annual return. Source

TSD Declaration of income and social tax

tulu- ja sotsiaalmaksu deklaratsioon (TSD)

The monthly return in which an employer declares each employee's pay, withheld income tax, social tax, unemployment premiums and funded-pension contributions to EMTA and pays the taxes due, each month. Source

Tulumaks Income tax

tulumaks

A flat 22% on pay after the basic exemption and the employee's unemployment and funded-pension contributions. The planned rise to 24% and the 2% security tax on wages were cancelled in December 2025, so the rate stays 22% in 2026. Source

II sammas Funded pension (second pillar)

kohustuslik kogumispension (II sammas)

The funded pension: by default 2% of gross pay withheld from the employee (members may choose 4% or 6%), deductible for income tax, with the State adding 4 points out of the social tax. Membership has been optional since 2021, so check each employee's status. Source

Sotsiaalmaks Social tax

sotsiaalmaks

The employer's main on-cost: 33% of gross pay with no ceiling, funding state pensions and health insurance. A minimum monthly base of €886 applies in 2026 (so at least €292.38 of social tax a month), which matters only for pay below the minimum wage. Four percentage points go to the employee's funded pension at no extra cost. Source

Töötuskindlustusmakse Unemployment insurance premium

töötuskindlustusmakse

1.6% of gross pay withheld from the employee and 0.8% paid by the employer, both uncapped, in 2026. The employee's premium is deductible for income tax and stops at pensionable age. Source

Põhipuhkus Basic annual leave

põhipuhkus

28 calendar days a year, not counting public holidays that fall within the leave. White-collar contracts usually give just the statutory 28 days. Source

Etteteatamistähtaeg Notice period

etteteatamistähtaeg

Employer notice is at least 15 calendar days with under 1 year's service, 30 days for 1–5 years, 60 days for 5–10 years and 90 days for 10 years or more, with pay owed for each day short. An employee resigning gives at least 30 calendar days. Source

Katseaeg Probationary period

katseaeg

Up to 4 months is presumed unless agreed otherwise (no more than half the term of a fixed-term contract under 8 months). Either side may terminate during probation on at least 15 calendar days' notice, for a reason consistent with the purpose of probation. Source

Koondamishüvitis Redundancy compensation

koondamishüvitis

On redundancy the employer pays one month's average wages, whatever the length of service; Töötukassa adds its insurance benefit for longer service. If the employee resigns because of the employer's material breach, the employer owes three months' average wages. Source

EMTA Estonian Tax and Customs Board

Maksu- ja Tolliamet

The authority that collects income tax, social tax, unemployment premiums and funded-pension contributions. Employers also register each employee's start and end of work in its employment register (TÖR) before work begins. Source

Tööinspektsioon Labour Inspectorate

The State agency that supervises working conditions, working time and occupational safety and houses the labour dispute committees. Source

Töötukassa Unemployment Insurance Fund

Eesti Töötukassa

The public fund that pays unemployment benefits. On redundancy it also pays the employee an insurance benefit on top of the employer's severance: one month's average wages for 5–10 years' service and two months' for over 10 years. Source

Töövaidluskomisjon Labour dispute committee

töövaidluskomisjon

A free, quick pre-court body (part of the Labour Inspectorate) that hears employment disputes, including challenges to dismissal; employees can also go to court. If it ends the contract after an invalid dismissal, compensation is generally 3 months' average wages. Source