Since the start of the year, changes to income tax mean everyone working in Estonia has a uniform tax-free income of €700. Employees need to submit an application through their employer to see the difference in their paycheck.

"Based on data submitted to the e-Tax Board, as of January, 42 percent of people have used their tax-free income. More people have taken the opportunity to submit a tax-free income application to their employer, which means that income tax has not been paid on a certain portion of their wages and that people have gained approximately €40 million more," said Aune Maria Marjapuu, lead specialist of the income tax department at the Tax and Customs Board.

If an individual does not submit an application, they will get the money back when they submit a tax return next spring.

The Selver supermarket chain employs more than 3,200 people. Twenty percent of employees have submitted an application to apply the maximum tax-free income.

"Those who did not have it applied at all or were not entitled to receive it last year have certainly used this opportunity, but not everyone did so in the first days of January. Of that fifth, another fifth submitted the application in February," said Kristjan Anderson, head of business accounting at Selver.

The change is expected to cost the economy €680 million, according to estimates from the Ministry of Finance.

Anderson said there was no increase in consumption at grocery stores in January, and the weak sales trend from the last quarter of last year continued.

"In terms of volume, January was slightly below January 2025. Sales of manufactured goods grew by a couple of percent, but overall sales in that segment were still below last year. Electricity and heating bills have reached people's mailboxes and are shockingly higher than at the beginning of last year. February is already halfway over, and energy bills are likely to be in the same range, so there will probably be no significant change in February either," he said.

A survey by SEB shows 30 percent of people would use the additional money gained from the tax change for current expenses. Twenty percent of respondents plan to put the money in savings.

The bank's analyst Mihkel Nestor said it is still too early to say whether expectations will match reality.

"But at some point that awareness will set in, especially in the summer months, when that €150 has been left over for some time and there is an opportunity to do something with it, and most of it will likely end up in consumption," he said.

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