Advance Payments of Social Tax in Estonia

Social tax plays an important role in ensuring the social security of the Estonian population. One of the key aspects of the tax system is the advance payments of this tax, which are required to be made by sole proprietors (SPEs).

Who is required to make advance payments?

SPEs are required to make advance payments of social tax four times a year. However, there are exceptions for which SPEs are exempt from this obligation:

• state pension recipients (including those on a flexible pension);
• persons with limited working capacity;
• students (with the exception of doctoral students receiving scholarships);
• persons under 19 years of age;
• those who started or ceased their activities during the quarter.

When registering as a sole proprietor during the quarter, advance payments are calculated proportionally to the number of days of business activity.

When are advance payments due? 

Advance payments are due by the 15th of the last month of each quarter:

• First quarter: by March 17th.
• Second quarter: by June 16th.
• Third quarter: by September 15th.
• Fourth quarter: by December 15th.

The tax liability is calculated based on the monthly social tax rate set annually by the state budget. For example, in 2025, the monthly rate is €820. This means the quarterly liability is €811.80 (€820 x 3 x 33%).

Calculating advance payments for partial tax exemptions

If the exemption from social security contributions applies only for a certain period of the quarter, the calculation is proportional. Let’s look at an example of calculating advance payments if the tax liability arose during half of the second quarter (50 days).

Therefore, the advance payment amount is €446.04.

What should you do if third parties pay your social contributions?

For a sole proprietor, the following may pay social tax:

• employer;
• state;
• city administration;
• local government.

In this case, the sole proprietor is not required to make advance payments themselves. This is provided the conditions for fully satisfying the social contributions of these third parties are met.

However, if the transferred payments are less than the established amount of mandatory payments (for example, €811.80 per quarter), the sole proprietor will have to cover the difference themselves.

Additionally, consider the situation where the total amount of social contributions from the employer or state is greater than the mandatory payments. The difference can be carried forward to cover future advance payments.

Let’s look at two examples:

Example No. 1

In the second quarter, the sole proprietor received a tax deduction of €200, but the social tax paid by the employer was €350. Therefore, the difference of €150 is carried forward to future periods.

Example #2

In the third quarter, the social tax liability was 300 euros. The amounts previously paid by the employer amounted to 50 euros. Additionally, there was a 150 euro balance from the previous quarter. The total amount payable by the individual entrepreneur would be 100 euros.

How to correctly calculate the advance payment amount?

There are several ways to help calculate the social tax advance payment amount in Estonia:

• consulting with Tax and Customs Board employees;
• using e-MTA electronic services.

Using online services helps avoid errors and simplifies the process of accounting for and paying social taxes.

Conclusion

Advance payments of social tax play a key role in the formation of the social security budget in Estonia. A proper understanding of the payment procedure and the specifics of calculating advance payments allows sole proprietors to effectively manage their financial obligations to the state.