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Measures List
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Measure Name
Date when measure came into force
Lowering employers rate from 1.4% to 1.0% 2013/01/01
Increase of minimum social tax 2014/01/01
Results 1 - 2 of 2.

Generic Tax Name Social security contribution (Employers)
Tax name in the national language Pensionikindlustus (20%), ravikindlustus (13%), eraldis kogumispensionideks (4%) (miinus), tööandja töötuskindlustusmakse, mittepalgaliste töötajate ja mittetöötavate isikute sotsiaalmaksed
Tax name in English Pension insurance (20%), Health insurance (13%), Allotment for funded pension (4%) (minus), Employers unemployment insurance payment, Social contributions by self- and non-employed persons
Member State EE-Estonia
Tax in force since 1992/01/01
If abolished, date on which the tax ceases to apply
Business version date 2015/01/01
Version date 2015/02/17
This file was last updated on

Type of tax
Direct taxes Personal income tax
Corporate income tax
Other
Indirect taxes VAT
Excise duty (EU harmonised)
Alcoholic beverages
Energy products and electricity
Manufactured tobacco
Other
Social security contribution Employers
Employees
Other
 
Legal base

First Social Tax Act: passed 19.09.1990 (State Gazette, 1990, 9, 102), entered into force 01.01.1991.

Current Social Tax Act: passed 13.12.2000 (State Gazette I, 2000, 102, 675), entered into force 1.01.2001. Last amended 19.06.2014 (State Gazette I, 29.06.2014, 109), entered into force 01.07.2014.

Unemployment Insurance Act: passed 13.06.2001 (State Gazette I, 2001, 59, 359), entered into force 1.01.2002. Last amended 19.06.2014 (State Gazette I, 29.06.2014, 109), entered into force 01.07.2014.
 
Who sets
The tax rate is set by



The tax base is set by



The reliefs are set by




Comments
 
Beneficiary





Comments
 
Geographical Scope

Estonia
 
Taxpayers
The base or rate of social security contributions paid by Employers on the income of employees and of blue collar workers Rates are identical
Bases are identical

Comments
Domestic-source income of non-residents is Subject to SSCer
Not Subject to SSCer

Comments

Social security contributions will not be paid in Estonia, if the employee has a ceritificate of a posted employee (E101, A1) issued by the authorities of an EU country, or a country with which Estonia has a social security agreement (Canada, Ukraina).

Comments

1. A person, who makes payments specified in § 2 of the Social Tax Act (except business income of sole proprietor):

  • resident legal persons;
  • natural persons;
  • non-residents, who have a permanent establishment in Estonia or who make payments specified in subsection 2 (1) of the Social Tax Act;
  • state, rural municipality and city authority.

2. A sole proprietor on business income.

3. The state, rural municipality or city in the cases specified in § 6 of the Social Tax Act.
 
Tax object and basis of assessment
Employers pay social security contributions for








Comments
Base for all contributions listed here above is the same Yes No
As general rule, the income subject to Social Security Contributions of Employers includes























Comments

In case of employers`unemployment insurance payments only employment income is the base.
Income considered Domestic income
Worldwide income
Comments

Social security contributions will be paid in Estonia, if the employee works in EU country, in Canada or in Ukraina and has a ceritificate of a posted employee (E101, A1) issued by the authority of Estonia.
Benefits in kind

The following benefits in kind are usually (partially or fully) subject to social security contributions paid by Employers












Comments

Fringe benefits are any goods, services, remuneration in kind or monetarily appraisable benefits which are given to a person specified in subsection 48 (3) of the Income Tax Act in connection with an employment or service relationship, membership in the management or controlling body of a legal person, or a long-term contractual relationship, regardless of the time at which the fringe benefit is granted.

The social tax shall be paid at a rate of 33% on fringe benefits and also on income tax  calculated on fringe benefits.

Comments

The tax base for social tax:

  • Wages and other remuneration paid to employees and public servants in money;
  • remuneration paid to members of the management or controlling bodies of legal persons and to the trustee in bankruptcy and members of the bankruptcy committee in the bankruptcy proceedings of a natural person;
  • the business income of sole proprietors, as defined in § 14 of the Income Tax Act, after deductions relating to enterprise and permitted in the Income Tax Act have been made;
  • remuneration paid to natural persons on the basis of contracts for services, authorisation agreements or contracts under the law of obligations entered into for the provision of other services;
  • fringe benefits within the meaning of the Income Tax Act, expressed in monetary terms, and on income tax payable on fringe benefits;
  • benefits paid pursuant to the Unemployment Insurance Act.

The tax base for unemployment insurance is employment income.
 
Deductions, Allowances, Credits, Exemptions
Capped contributions No cap
Cap in monetary units: 70200.0  EUR/Natcur
Cap in % of the tax base:
Reduction

The reduction is
No reduction
A lump-sum amount
In percentage of base:
     
Based on salary
Capped
Comments

Sole proprietor has the upper limit. Social tax shall be paid on the business income of sole proprietors, but annually on an amount not more than fifteen times the sum of the minimum monthly wages for the taxable period (12x15x390)
Allowances
The basic yearly allowance for an individual amounts to:
The basic yearly allowance for a couple amounts to:
Additional allowance for 1st child
Additional allowance for 2nd child
Additional allowance for 3rd child
Additional allowance for additional child
Additional allowance for old age dependents
Comments
Credits
The basic yearly credit for an individual amounts to:
The basic yearly credit for a couple amounts to:
Additional credit for 1st child
Additional credit for 2nd child
Additional credit for 3rd child
Additional credit for additional child
Additional credit for old age dependents
Social Security Contributions paid by Employers are tax deductible Yes No

Comments

Exempted payments and benefits are:

  • compensation for official travel, accommodation and other expenses, daily allowances and remuneration for business travel abroad paid to a public servant, an employee or a member of the management or controlling body of a legal person;
  • compensation for service or employment related use of a personal automobile paid to a public servant, employee, or member of the management board;
  • sickness benefit made pursuant to § 122 of the Occupational Heath and Safety Act and which doesn’t exceed the average wage of the employee and employers’ expenses pursuant to § 13 of the Occupational Heath and Safety Act;
  • payments to residents of a receiving state who are employed in a foreign mission of Estonia;- remuneration specified paid to non-residents by an Estonian resident if the work is done in a foreign state;
  • remuneration paid to non-residents who operate as sole proprietors in a foreign state and who certify that social security charges or contributions are paid on such remuneration in that foreign state;
  • payments made to the Members of the Riigikogu pursuant to § § 30, 31, 33 and 34 of the Members of the Riigikogu Status Act;
  • payments made pursuant to § 160 of the Defence Forces Service Act;
  • amounts payable to persons who are in custodial institutions on the basis of court judgments;
  • the cost of meals given free of charge to members of the crews of ships during voyages and to members of the crews of civil aircraft during flights, which does not exceed 6 EUR per day per person;
  • payments made pursuant to § 3 of the President of the Republic Official Benefits Act, § 121 of the Salaries of State Public Servants Appointed by Riigikogu or President of the Republic Act and § 62 of the Foreign Service Act;
  • wage compensation paid for additional holiday days and breaks for feeding a child provided for in § § 66 and 135 of the Employment Contracts Act and in subsection 10 (5) of Occupational Heath and Safety Act;
  • payments made pursuant to subsection 14 (1) of the Heath Insurance Act

Tax credit:

If social tax for a sole proprietor is also paid by his or her employer or, pursuant to § 6 of the Social Tax Act, by the state and if the person’s monthly business income is less than the minimum, the amount of social tax payable on the basis of his or her business income may be less than the amount of tax calculated on the basis of the minimum on the condition that the total amount of social tax payable for him or her by the employer or, pursuant to § 6 of the Social Tax Act, by the state on the basis of business income is at least equal to the amount of tax calculated on the basis of minimum.
 
Rate(s) Structure
The following rates apply to Social Security Contributions paid by Employers
Pensions
20.00 %  From  EUR/Natcur  To  EUR/Natcur

Health care
13.00 %  From  EUR/Natcur  To  EUR/Natcur

Unemployment
0.80 %  From  EUR/Natcur  To  EUR/Natcur

Child care

Work-related illnesses and/or accidents

Education leave

Maternity leave

Others

Comments
Special surcharges

There are special surcharges in the form of:
Surcharge 1 : Name:
A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments

Comments

The rate of social tax is generally 33 per cent of the taxable amount. The proportion of social tax transferred into the state pension insurance funds is 20 per cent and the proportion of social tax transferred into the state health insurance funds is 13 per cent. In particular cases (Art 6 Sec 1 Clauses 6, 61,8, 9, 11 and 13 of the Social Tax Act) and in the case of the unemployment insurance benefits provided for in the Unemployment Insurance Act it is 13% of the taxable amount.
 
Tax due date

The taxable period for social tax is one calendar month (except sole proprietor). The tax due date is the tenth day of the month following the taxable period.

The taxable period for social tax on the business income of a sole proprietor is one calendar year and his tax due date is the 1st October of year following the taxable period.
 
Tax collector

Estonian Tax and Customs Board.
 
Special features

Minimum and maximum obligation:

For employers there is a minimum obligation on social tax to be paid, which is equal to 33% of the minimum envisaged by the Social Tax Act. In 2015 the minimum is 355 € per month. The minimum social tax obligation of 117.15 € (355 x 33%) has to be paid monthly for each employee (except in the case of a person receiving a state pensions, a parents raising child of up to 3 years of age or three or more children, a pupil, a person unemployed more than 12 months and a student).

Sole proprietors pay social tax on their business income, but annually not less than the amount calculated from the minimum (355 x 12 = 4,260 € in 2015) and not more than the amount calculated from fifteen-fold minimum wage (390 x 15 x 12 = 70,200 € in 2015).

Special cases:

The law enacts several special cases of paying social tax when tax is paid by the state and the rural municipality or city (e.g. for parent raises child of up to 3 years of age or three or more children; for persons receiving unemployment benefit). In special cases social tax shall be paid based on the aforementioned minimum.

Tax changes

On 01/01/2015 (approved 26/09/2014) came into effect the lowering of unemployment insurance payment rate from 1.0% to 0.8%. Estimated effect in 2015 ca -25 mil €, 2016 ca -26 mil, 2017 ca -28 mil, 2018 ca -30 mil. Low unemployment rate and sufficient reserves allow lowering the rate and decrease tax burden of labour.

On 01/01/2015 (approved 18/12/2013) came into effect the change in fringe benefits - abolition of compensation of a car without logbook. Cash based revenue increase in 2014-2017 is ca 2.5 mil € each year. This measure is a part of a wider overhaul of company car taxation with the aim of reducing inefficiencies in tax expenditure and thereby increasing tax revenues.

 
 
Economic function







Comments
 
Environmental taxes



Comments
 
Tax revenue
ESA95 code d6111, d6113

Year
Annual tax revenue (millions)
Currency
Tax revenue as % of GDP
Tax revenue as % of total tax revenue
2012 1,863.20 EUR 10.35
2011 1,808.00 EUR 10.85
2010 1,763.00 EUR 11.98
2009 1,744.20 EUR 12.33
2008 1,859.80 EUR 11.26
2007 1,655.80 EUR 10.19
2006 1,331.50 EUR 9.85
2005 1,116.00 EUR 9.91
2004 975.60 EUR 10.05
2003 899.00 EUR 10.32
2002 830.90 EUR 10.69
2001 743.50 EUR 10.66
2000 673.50 EUR 10.91
1999 593.40 EUR 11.03
1998 563.40 EUR 11.23
1997 508.20 EUR 11.35
1996 423.00 EUR 11.31
1995 340.00 EUR 11.71

Comments