Estonia’s pension-age guidance sets out the 2027 and 2028 thresholds

Estonia’s statutory pension age is 65 years and one month in 2027Emta and 65 years and three months in 2028Emta. The Tax and Customs Board’s pension-age tax-allowance guidance now sets out those thresholds alongside the age of 65 for 2026Emta. For payroll, the relevant distinction is reaching statutory pension age, rather than simply receiving a pension.

The government regulation establishing the later thresholds applies the 2027 age from 1 January 2027Riigiteataja and the 2028 age from 1 January 2028Riigiteataja. The guidance explains that the pension-age tax allowance applies from the beginning of the calendar year in which a person reaches statutory pension ageEmta. General tax-free income then ceases to apply to that person for the year.

For 2026, the pension-age tax allowance is €776 per month or €9,312 per yearEmta. Those amounts are the figures stated for 2026; the later pension-age thresholds identify when a person reaches the relevant age in the following years. Payroll records should distinguish the applicable year’s allowance amount from the age test used to identify the eligible group.

The authority also distinguishes taking a pension early from reaching statutory pension age. A person using a flexible old-age pension before that age remains subject to the general tax allowance until the year in which statutory pension age is reachedEmta. Conversely, postponing pension receipt does not postpone eligibility for the pension-age allowance once the relevant year beginsEmta.

When the Social Insurance Board pays an old-age pension, it applies the pension-age allowance automaticallyEmta. A person who continues working and has unused allowance after its application to the pension can ask the employer to apply the unused amount to salaryEmta. The employee must submit a written request and specify that amountEmta, and is responsible for its accuracy.

Payroll teams should review employees entering the pension-age cohort and changes in the use of the allowance when pension payments begin. The applicable provisions are § 23⁵ of Tulumaksuseadus and §§ 1–2 of the regulation “Vanaduspensioniea kehtestamine”.