How does payroll taxation work in Estonia?
Employee's payroll calculation
Gross salary
Tax exempt income
Unemployment tax paid by the employer 1.6%
Taxable income
Income tax 22%
Social security tax 33%
Unemployment tax paid by the employee 0.8%
Employee to receive
Total taxes
Total cost for the employer
2 000 EUR
654 EUR
32 EUR (1.6% x 2 000)
1346 EUR
296.2 EUR
660 EUR
16 EUR (0.8% x 2 000)
1671.8 EUR (2 000 – 296.2 – 32)
1004.2 EUR (296.2 + 32 + 660 + 16)
2676 EUR (2 000 + 660 + 16)
From the total cost 2676 EUR - 62.47% (1671.8 EUR) is received by the employee and 37.53% (1004.2 EUR) is paid in taxes.