Monthly Archives:' January 2016

Tax rates and amount of tax-free income in 2016 in Estonia

Starting 01.01.2016 there will be new tax rates.

– The rate for withholding income tax is 20%.
– Income exempt from tax is 2040 euros per year, 170 euros per month.
– Additional income exempt from tax in the case of pensions is 225 euros per month.
– Additional income exempt from tax in the case of occupational accident or occupational disease compensation is 64 euros per month (for the implementation of which an application from the person receiving the payment is required).
– The social tax (paid by employer in full) rate is 33% of the gross payment per month.
– The monthly rate on which the minimum social tax obligation is based is 390 euros i.e. the minimum obligation of social tax is 128.70 euros per month.
– The unemployment insurance premium tax is 1.6% for the employee and 0.8% for the employer of the amount of gross salaries monthly.
– The funded pension tax rate is either 2% or 3% of the gross salary of a resident employee.
– The tax exempt limit of the foreign assignment daily allowance is 50 euros for the first 15 days of the foreign assignment, however for 15 days in a calendar month at most and 32 euros for every following day.
– Daily allowance paid over the tax-free limit is deemed to be wages and will be taxed as salary.