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Freelancer taxes in Estonia (2026)

A freelancer earning €60,000 a year in Estonia keeps between 33,204 EUR and 46,800 EUR depending on the scheme — the best option is "OÜ — private limited company, profit distributed as dividends" at an effective burden of 22.0%. 3 schemes below, each computed from official rules.

Verified

Tax schemes

OÜ — private limited company, profit distributed as dividends

activeCompany

What you pay

  • Corporate income tax on distributed profit (22/78 of net = 22% of gross profit) — 22% of profit

Net income examples

Gross/yearNet/yearBurden
30,000 EUR23,400 EUR22.0%
60,000 EUR46,800 EUR22.0%
120,000 EUR93,600 EUR22.0%

Computed by our open tax engine — assumes no deductible expenses, full-year tax residency. Rules as of Jan 1, 2026.

Models the pure dividend route. Two things are NOT modeled: (1) taking money as SALARY or a board-member fee instead of a dividend — that triggers 33% employer social tax plus 22% income tax (after the 8,400/yr basic exemption) and employee unemployment/pension, giving an effective burden around 38–41% at these income levels, higher than the dividend route, so a solo owner who does not need Estonian pension/health cover usually distributes dividends; (2) fringe-benefit and expensed-perk rules. Corporate tax was legislated to rise to 24/76 from 2026 but that increase was CANCELLED in the June 2025 state-budget decision, so 22/78 remains in force for 2026. e-Residency gives company-management access but is NOT tax residency; a non-resident owner's home country may tax the dividend.

FIE — self-employed sole proprietor (füüsilisest isikust ettevõtja)

activeSole proprietor

What you pay

  • Social tax (33% of net business income) — 33% of profit (min 3,509, max 37,462/year)
  • Income tax (22%) after basic exemption — progressive on profit (allowance 8,400): 22% above

Eligibility

  • Requires tax residency
  • A registered natural-person business. Business income (revenue minus documented business expenses) is subject to 33% social tax and 22% income tax. Social tax paid reduces the income-tax base (form E is 'adjusted by social tax'); the annual basic exemption (8,400 EUR in 2026, universal since the 'tax hump' was abolished) applies. Social tax has a minimum (886 EUR/month basis → 3,509.04 EUR/year minimum) and a maximum base (ten-fold minimum wage: 10 × 12 × 946 = 113,520 EUR/year → max 37,461.60 EUR social tax). Paid as quarterly advance payments.

Net income examples

Gross/yearNet/yearBurden
30,000 EUR17,526 EUR41.6%
60,000 EUR33,204 EUR44.7%
120,000 EUR66,228 EUR44.8%

Computed by our open tax engine — assumes no deductible expenses, full-year tax residency. Rules as of Jan 1, 2026.

Estonia levies social tax on FIE net business income and, by the 'income adjusted by social tax' rule, that social tax reduces the income-tax base — modeled here as deductibleFrom profit. A finer point of Estonian law reduces the social-tax base itself so that social tax is not levied on the social-tax amount (an approx. 33/133 grossing); this is NOT modeled — social tax is applied to full profit, which slightly OVERSTATES the burden. Health insurance and state pension accrue only if the minimum social tax is paid. IP/royalty and agricultural/timber special deductions (up to 5,000 EUR each) are not modeled. Compared with the OÜ dividend route (~22%), FIE is materially heavier (~42–46%) because of the 33% social tax — kept because it is the direct self-employment form and gives the person Estonian pension/health cover.

Entrepreneur account (ettevõtluskonto) — simplified turnover tax

activeSole proprietor

What you pay

  • Entrepreneur-account business income tax (20% of turnover) — 20% of revenue

Eligibility

  • Revenue cap 40,000 EUR/year
  • Activities: services to private individuals, sale of self-produced low-cost goods
  • Requires tax residency
  • A special LHV bank 'entrepreneur account' where a flat business-income tax is withheld automatically on every incoming payment. Base rate 20% of turnover in 2026 (rises to 22%/24%/26% if the person has a 2%/4%/6% funded-pension obligation). The 20% already bundles income tax (22/55) and social tax (33/55). NO business expenses may be deducted and no basic exemption applies. Turnover cap 40,000 EUR/year; above it, or when selling to VAT-registered businesses, the person must register as a regular entrepreneur. Best for low-expense service work; the bundled social-tax share may be below the amount needed for full health-insurance/pension cover.

Net income examples

Gross/yearNet/yearBurden
30,000 EUR24,000 EUR20.0%
60,000 EURover income cap—
120,000 EURover income cap—

Computed by our open tax engine — assumes no deductible expenses, full-year tax residency. Rules as of Jan 1, 2026.

Base rate is 20% for a person with no funded-pension (II pillar) obligation; it rises to 22% (2% pillar), 24% (4%) or 26% (6%). This scheme models the 20% base rate. The 20% bundles income tax and social tax, so the person cannot also claim the 8,400 EUR basic exemption here. Not usable above 40,000 EUR turnover or for B2B sales to VAT-liable clients, so it is a niche route for small solo service earners rather than a full IT-freelancer regime.

Try your own numbers

Same engine, your income. For a cross-country comparison use the full calculator.

  1. 1 OÜ — private limited company, profit distributed as dividends
    46,800 EURnet/year
    22.0% burden
  2. 2 FIE — self-employed sole proprietor (füüsilisest isikust ettevõtja)
    33,204 EURnet/year
    44.7% burden
  3. 3 Entrepreneur account (ettevõtluskonto) — simplified turnover taxover income cap
    48,000 EURnet/year
    20.0% burden