☑️ The Basics


Currency: Euro (Rate)

Public Holidays: 12 public holidays (see here)

Employer Taxes: 33.8% of gross salary

Official Language: Estonian

Payroll frequency: Monthly

Three things to know about employing in Estonia


  1. Estonia's new Digital Nomad Visa enables remote workers living in Estonia to work for their foreign employer or their own company registered abroad. For more information about eligibility and application process, please visit the e-Residency page.
  2. Any unused holiday entitlements are transferred to the next calendar year, and expire within one year from the end of the calendar year for which the holiday entitlement has been calculated. Unused, non-expired entitlements can also be cashed out upon termination of an employment contract.
  3. Non-compete agreements in Estonia cannot last more than a year from the termination of the employee's contract. In return, the employee is entitled to a reasonable monthly compensation, the amount of which should be evaluated on a case-by-case basis depending on the extent of the restrictions.

Employment in Estonia


Notice Period

Resignations: 14 days to one month, depending on the employment contract

Dismissals: Notice period is determined by the length of employee's service:

Termination & Severance

Employers can choose to dismiss an employee by paying them compensation in lieu of notice.

Employees being made redundant are entitled to one month's average salary of their previous six months' wages as severance pay.

Employees who have worked between five and 10 years are entitled to an additional month’s salary as severance pay. Employees who have worked for over 10 years are entitled to an additional two months’ salary.

Probationary period

No longer than four months.

Minimum Wage

584 EUR per month.

IP protection and non-compete agreements

Non-compete agreements must be clear and reasonable in scope. It cannot last more than a year from the termination of the employee's contract. The employer must pay the employee a reasonable monthly compensation in return for adhering to the agreement, the amount of which should be evaluated on a case-by-case basis depending on the extent of the restrictions.

Working Hours

Eight hours per day, 40 hours per week. Employee can take at least one 30 minutes lasting break after working 6 hours.

Common business hours are from Monday to Friday, 9:00-18:00 with a lunch break of one hour.

Overtime

Overtime work beyond standard hours should be paid at a 1.5x rate or compensated with time off. Work during public holidays is compensated at the 2x rate.

Overtime rules must be clearly stated in the employment contract and employees have a right to refuse to work overtime.

The total working time, including overtime, may not exceed an average of 48 hours per week over a 4-month recorded period.

Paid Holidays

28 days leave per year, paid by the employer.

Any unused holiday entitlements are transferred to the next calendar year, and expire within one year from the end of the calendar year for which the holiday entitlement has been calculated.

Unused, non-expired entitlements can also be cashed out upon termination of an employment contract.

Sick pay and time off

Employees are entitled to up to 182 paid sick leave days per year, which are paid at a rate of 70% of their previous year's average salary.

Sick leave is paid starting from the 4th day of illness and is paid by the employer.  From the 9th day onwards, it is paid by health insurance.

Exception from 01.01.2021 – 30.04.2021: Employer will pay 70% from the 2nd to 5th day. Health insurance will cover the sick pay from 6th day onwards.

Parental leave

Employees are entitled to 20 weeks (140 days) of maternity leave. This can be begin 70 days before the expected due date. Maternity leave is paid by health insurance at a rate of 100% of the employee's salary.

Employees are also entitled to paternity leave of total 30 calendar days that can be taken within two months before the expected due date, and up to two months after the child's birth. The social security covers the leave. Paternity leave is is capped at three times the national wage or 100% of the employee's salary, whichever is higher.

Taxes in Estonia


<aside> 💡 You can get a detailed breakdown of the employer contributions for any gross salary by using our Oyster Platform Quote Generator

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Employees


Social Security (3.6%)

Income tax (flat rate of 20%)

Employers


Total social contributions (33.8%)


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