For war refugees from Ukraine

Registration of employment and taxation of wages in Estonia.

Due to war in Ukraine, refugees have arrived in Estonia from Ukraine and are ready to work in Estonia. There are also employers in Estonia who want to offer work in Estonia to people who have arrived from Ukraine.

The Estonian Unemployment Insurance Fund will help you find a job. Information on the website and in the e-environment of the Estonian Unemployment Insurance Fund is available in Estonian, English and Russian. Some information is also available in Ukrainian.

The Estonian employer registers you in the employment register before starting work. For this purpose, the personal identification code issued to you in Estonia will be used. If you do not have a personal identification code and it is not possible to apply for it before starting work, the Estonian employer can register your employment with your date of birth for up to five days. If you receive an Estonian personal identification code, the employer will change the entry in the employment register.

The Labour Inspectorate, the Estonian Unemployment Insurance Fund, the Estonian Health Insurance Fund, the Social Insurance Board and the Police and Border Guard Board have the right to use the data of the employment register.

An entry in the employment register guarantees you health insurance in Estonia.

Your salary is declared and taxes are paid by the Estonian employer from the first day of employment in Estonia. Taxation of your salary is different if you are

  • a resident of Estonia or
  • a resident of Ukraine.

Residency is determined by the Estonian Tax and Customs Board. To do this, you must submit an application form for determination of residency (form R). You can send the form R digitally signed to the e-mail address emta@emta.ee or submit it to the most suitable service bureau.

As a war refugee, you do not have the opportunity to return to your former permanent residence in Ukraine and it is not known if and when this opportunity will reopen for you, the Estonian Tax and Customs Board considers your place of residence to be Estonia, where you live and work. Therefore, you have the opportunity to submit a form R and you will be appointed a resident of Estonia.

As an Estonian resident, your employer declares and pays your salary on a monthly basis:

  • income tax 20%,
  • social tax 33%,
  • unemployment insurance premium (employee rate 1,6% and employer rate 0,8%), and
  • contributions to mandatory funded pension 2%.

As an Estonian resident, your current general tax-free income of up to 500 euros per month applies to you if your salary does not exceed 1200 euros per month. This means that if your salary is up to 1200 euros per month, 20% income tax will be levied up to 700 euros per month (1200 – 500 = 700).

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As a non-resident (as a resident of Ukraine), your employer declares and pays your salary on a monthly basis:

  • income tax 20%,
  • social tax 33%,
  • unemployment insurance premium (employee rate 1,6% and employer rate 0,8%).

NB! As a resident of Ukraine, you are not entitled to general tax-free income and it is not possible to join a funded pension, i.e. Pillar II.

Estonian pension system consists of the so-called three pillars:

  • state pension or Pillar I. 33% of the social tax paid by the employer is 20% of the state pension, ie the share of the first pillar (16% for people who have joined the second pillar) and 13% of the the health insurance.
  • funded pension or Pillar II. In the case of people who have joined the second pillar, 2% of the funde pension tax is deducted from their salary, and 4% is added to it at the expense of the first pillar or social tax.
  • supplementary funded pension or Pillar III.
     

Payment of funded pension payments (Pillar II)

As an Estonian resident, people who were born in 1983 and later will immediately join a funded pension, i.e. the second pillar.

If you do not want to join a funded pension, i.e. Pillar II, it is very important that you submit an application (separate form – application for non-payment) in the self-service environment of the Pension Center "My pension account“, in the internet bank or at a bank branch on the spot.

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You do not have the possibility to use an ID card or Mobile ID or Internet banking, it is necessary to go to the bank branch on the spot. You can also find the bank branches of larger centers from the link above, where you can go to apply even if you are not a customer of a specific bank.

If you submit a non-payment application, you will only be able to re-join the funded pension, i.e. Pillar II, after 10 years.

The withholding and termination of the funded pension, i.e. the payment of the second pillar, starts and ends 3 times a year: from 1 January, 1 May or 1 September (depending on when you submit a non-payment application). You can read more at the website of the Pension Center (in Estonian).

Last updated: 04.04.2022

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