Pursuant to subsection 1 of § 48 of the Income Tax Act, employers pay income tax on fringe benefits granted to employees.
Based on clause 7 of subsection 1 of § 2 of the Social Tax Act, social tax is paid on fringe benefits within the meaning of the Income Tax Act, expressed in monetary terms, and on income tax payable on fringe benefits.
Declaration
The period of taxation of fringe benefits is one calendar month. The employer declares the fringe benefits granted to employees and income and social tax calculated on fringe benefits during a calendar month in Annex 4 of the form TSD, which must be submitted together with the form TSD to the Estonian Tax and Customs Board by the 10th day of the month following the calendar month in which the fringe benefit was granted. The tax amount is paid to the bank account of the Tax and Customs Board by the same date at the latest.
Legal basis
Handbook “Fringe benefits”
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Expenses directly related to regular use of sporting or mobility venues
Sporting and mobility venues are public and companies’ own sports clubs, the costs of which are covered for employees or reimbursed to employees based on expense documents.
Sporting and mobility venues are, for example:
- stadiums, sports-specific fields and halls;
- gymnasiums, artificial fields, halls, health trails, bicycle paths;
- green areas, parks, streets, squares.
Since the purpose of the tax incentive is primarily to support the continuous health improvement of employees, the tax exemption does not extend to situations where the employer wants to rent a sports complex or training place for a short period of time, e.g. for company sports days.
A company’s own sports club also means, for example, a non-profit organisation created by employees, to which membership fees are paid, from which the members' sports expenses are covered.
Example
Continuous participation in folk dance, ballroom dance classes, yoga training, adult ballet, belly dance classes, swimming training, aerobics, gym (including sports club membership fee), table tennis training, sauna yoga, etc. are considered health promotion expenses. Also, the costs of mobile apps and exercise videos that offer different programs for sports/exercise in gyms, on health trails, at home, etc.
NB! Purchasing services of water centres, spas, sauna centres in such a way that one does not do continuous sports/training activities there is not subject to tax incentive.
Massage
The list of expenses includes expenses directly related to massage. Massage also includes massages performed with or using a device, such as roller massage, LPG massage, or massage on a massage chair. The massage provider does not have to be registered in the healthcare management information system, nor is there a requirement for a professional certificate for massage providers.
All beauty treatments, including fat-reduction procedures, body and facial treatments, and hand and foot treatments (e.g. pedicures, manicures) that include massage, are subject to taxation as fringe benefits. Beauty treatments are not regarded as tax-exempt health improvement expenses, i.e. expenses directly related to massage within the meaning of clause 2 of subsection 55 of § 48 of the Income Tax Act. For the tax incentive under the massage provision (clause 2 of subsection 55 of § 48 of the Income Tax Act) to apply, the service as a whole must qualify as a massage.
Example
| Service | Description | Is the service as a whole considered a massage, i.e. tax-exempt under clause 2 of subsection 55 of § 48 of the Income Tax Act? |
|---|---|---|
| LPG, roller massage | Device-based massage | Yes |
| Massage on a massage chair | A massage chair uses mechanical components (rollers, airbags, vibrating mechanisms) to relax muscles and improve blood circulation. | Yes |
| EMS magnet | Device-based treatment to increase muscle mass, improve muscle tone, and reduce body fat | No |
| Cold Lipo | Fat-reduction procedure | No |
| Thermo-C | Device-based body treatment | No |
| Cavitation | Fat-reduction procedure | No |
| Cryolipolysis | Fat-reduction procedure | No |
| Pressotherapy | Device-based body treatment | No |
| Massage of the shoulder area, décolletage, etc. | Massage of a specific area of the body | Yes |
| Lymphatic massage | A specific type of massage | Yes |
| Facial massage | Massage of the facial area | Yes |
| Osteopathy | Holistic manual therapy | No |
The tax incentive for rehabilitation (clause 4 of subsection 55 of § 48 of the Income Tax Act) may apply to certain services that do not qualify as massage within the meaning of clause 2 of subsection 55 of § 48 of the Income Tax Act. For more information about the conditions, please see the article “Expenses on dental care, rehabilitation and other services”.
Last updated on 22.04.2026
Last updated: 05.11.2025