The year 2026 brings several notable changes related to taxes and fees that affect almost everyone. These adjustments will be reflected in payroll, electricity bills, prices on store shelves and the way businesses are managed. Although 2026 includes a number of tax and fee changes, it is generally a relatively calm year. No major or unexpected reforms are being introduced and most changes are aimed at gradual system adjustments and ensuring security. For clarity, the topics have been divided into two main areas: everyday life and the business environment. This allows each reader to focus primarily on what is most relevant to them.
For business customers
Increase in alcohol and tobacco excise duties
From 1 January 2026, excise duty rates on tobacco products and alcohol in Estonia will increase by 10%. Excise duty increases are usually passed on to prices.
Increase in fuel and electricity excise duties
In 2026, from 1 May, excise duty rates on certain fuels and electricity will increase:
- Natural gas – €66.58 per 1,000 m³
- Shale oil fuel oil – €515 per 1,000 kilograms
- Electricity – €3.07 per 1 MWh
Increase in the minimum social tax obligation
In 2026, the monthly minimum base for social tax liability will be €886. This means that the employer must pay at least €292.38 in social tax per month.
Increase in the daily maximum for incapacity benefits
In 2026, the maximum daily amount of incapacity benefit will be increased to €126.87.
Reduction in gambling tax rates
For the organization of games of chance, games of skill, remote gambling, gambling tournaments, ring games, ring game tournaments and toto, the gambling tax rate has been reduced from the previous 6% to 5.5%.
As a result of this change, online casino operators are largely exempt from paying gambling tax, as currently only remote games of skill are taxed, while remote games of chance are excluded. Games of chance, such as roulette, blackjack, and casino slots, make up the majority of games offered by online casinos. The Estonian Parliament considers this an oversight and has begun taking steps to correct the issue as quickly as possible.
To everyone
Two new charges added to electricity bills
Two new charges will be added to electricity bills: a balancing capacity charge and a security of supply charge. For an average electricity consumer, this means an additional cost of approximately €3.50.
Abolition of the tax wedge
From 2026, the current so-called tax wedge will be abolished, and a uniform income tax-free allowance will apply to all employees: €700 per month or €8,400 per year (for those of retirement age: €776 per month and €9,312 per year). A person earning an average salary will gain over €1,800 per year.
Change to the land tax increase cap
From 2026, instead of the current nationwide cap, all local governments will have the option to set their own cap on land tax increases. This can range from 10% to 100%. This means the local government decides how much the land tax may increase at most within one year.
In addition, the local government will set a homeowner’s allowance ranging from €0 to €1,000.
Motor vehicle tax relief for parents
According to the legislative amendment, the motor vehicle tax for car owners with children will be reduced by up to €100 for each minor child (including 18-year-olds). The change will also be applied retroactively to the portion of tax already paid. Individuals do not need to take any action themselves to receive the tax reduction.
For businesses, 2026 primarily means more careful cost planning, especially in relation to excise duty rates, energy costs and labour-related taxes. For individuals, while 2026 brings some additional expenses, such as new charges on electricity bills, these are offset by the abolition of the tax wedge and targeted tax incentives that improve net income for many people.
