III pillar

Questions and answers about the III pillar tax refund

What is the III pension pillar?

The III pillar of the Estonian pension system is a supplementary funded pension.

You can make contributions to the III pillar yourself or through your employer. The size of the contributions is not determined by the state, but by you.

You can also withdraw money flexibly from III pillar funds. The III pillar is not linked to the state pension (I pillar) or funded pension (II pillar).

How does the III pillar tax return work?

The III pension pillar is subject to a 20% income tax refund on contributions that do not exceed 15% of annual gross income or 6,000 euros. If 15% of gross income is more than 6,000 euros, then 6,000 euros is tax-free. If 15% is less than 6,000 euros, then 15% of gross income is tax-free.

Income tax will be refunded if you have paid income tax in Estonia during the year and if there is any income tax to be refunded after all other deductions (for example, education expenses).

How much would it be reasonable for me to invest in the III pillar?

A suitable contribution depends on various factors such as income, current expenses and liabilities, age, pension goals. However, it is generally recommended to save as much as possible, taking advantage of tax incentives.

15% of your annual gross income is a good goal, because this way you will maximize the income tax refund and it will boost your investment.

Contributing to the III pillar is primarily for long-term saving, so it is not worth investing money that you will need in the near future.

How to get the most out of the III pillar income tax refund?

If you want to know how much you still have left in this year’s income tax refund, see how much you have already paid to the III pillar. If you do not remember the amount, log into pensionikeskus.ee and go to “Reports” -> “Receivables” -> choose III pillar receipts for the current year.

Then calculate your income for the year (incl. salary income, parental benefit, business income and other taxable income). If in doubt about the amount, log into emta.ee and go to “Registers and inquiries” – > “My income”.

Then calculate 15% of your annual income. If it is more than 6,000 euros, your tax-free III pillar contributions will be 6,000. If not, then the 15% of your annual income. The difference between the payments made so far and the tax refund ceiling you have now found can be invested before midnight on
27 December to get the most out of the tax refund.

If you have already maximized your III pillar income tax return, why not give a gift to a family member or friend! If you make contributions to the III pillar of your family member or friend, it will be included in their income tax refund.

Additional information: https://www.emta.ee/en/private-client/taxes-and-payment/tax-incentives/contributions-supplementary-funded-pension


Let’s say that your gross salary is 1,700 euros per month, and this year you have already contributed 1,200 euros in the III pillar.
15% of your annual income is 1,700 euros x 12 months x 15% = 3,060 euros. This amount is less than 6000 euros and therefore the ceiling of your III pillar tax deduction will be 3,060 euros.

How much do you gain from it?

On the 1,200 euros paid into the III pillar during the year, you will gain
20% x 1200 = 240 euros.
If you find a way to increase your investments, you can gain up to
20% x 3,060 = €612 in total.

You can also use different calculators that help you determine the amount of tax-free III pillar contributions. They can be found, for example, on the websites of Tuleva, Swedbank or SEB. In addition, more in-depth Excel templates are available from the rahafoorum.ee page of Taavi Pertman and the moneysmarterme.eu page of Jekaterina Tint.

Make a contribution!

You can make the payment for III pillar fund contribution on the page of your account manager / internet bank:


How can I find out what my gross income is this year?

  • Log into emta.ee
  • Go to ” Registers and inquiries”
  • Choose ‘My income’

How can I find out how much money I have transferred to the III pillar this year?

  • Log into pensionikeskus.ee
  • Go to “Reports” -> “Receivables”
  • Choose III pillar receipts for the current year.

How is the III pillar tax refund calculated together with education expenses and other tax refunds?

From a person’s taxable income, first the basic exemption, the increased basic exemption for a parent and up to 1,200 euros in expenses (housing loan interest, education expenses, gifts and donations) are deducted, and then the contributions to the III pension pillar are deducted. Since the tax exemption for III pension pillar contributions is obtained through a refund of income tax, it should be taken into account when making the contributions whether there is any income tax to be refunded after all the deductions. If the income tax paid is already refunded by means of other deductions, the III pillar contributions remain taxable.

When and how can I use the money from the III pillar?

Money can be withdrawn from the III pillar at any time. When withdrawing, income tax of 20% must be paid, and in some funds before retirement age there is also a withdrawal fee.

When you retire, you can start receiving payments from your III pillar savings. The specific conditions depend on the personal situation and the rules related to a particular fund or insurance product.

Tax deductions are also available for withdrawing money from the III pillar. If you have been saving in the III pillar fund for at least 5 years, then after the age of 60, a 10% rate will be applied to withdrawing money (instead of the usual 20%). If you enter into a pension fund contract upon reaching pension age and make withdrawals in the form of regular payments, you do not have to pay any income tax on it. Tax benefits for those who started saving in the third pillar before 2021 apply from the age of 55.