Hire employees
and contractors in Estonia

Remote’s guide to employing in Estonia

Capital city
Euro (EUR)
Population size
1,329,460 (2021)
Language spoken

Facts & stats

The Republic of Estonia (Eesti Vabariik) is a European Union member, organized as a unitary parliamentary republic.

For a country with a population of less than 2 million, Estonia’s GDP ranks well above average at 37 on the global scale, driven by membership in the EU, and a flourishing, innovative tech sector. Estonia is a progressive nation with a healthy local economy, a high human development index, and a stable democracy —all of which make this Easter European nation an attractive proposition for international employers.

Estonia is a well-established destination for digital nomads and remote workers, with many coworking spaces, and quality internet connectivity.

Estonia Map
  • Capital city
  • Currency
    Euro (EUR)
  • Language spoken
  • Population size
    1,329,460 (est. 2021)
  • Ease of doing business
    Very Easy (2020)
  • Cost of living index
    56.45 (2021)
  • Payroll frequency
  • VAT - standard rate
  • GDP - real growth rate
    5.0% (2019)

Grow your team in Estonia with Remote

To employ in Estonia, companies must own a local legal entity in the country or work with a global employment solution. Managing payroll, benefits, taxes, and compliance in Estonia can get complicated, especially without established local relationships.

Remote’s global employment solution makes it easy for your company to employ workers in Estonia quickly, efficiently, and in full compliance with all applicable labor laws. We take on the responsibility and legal risks of international employment so you can focus on hiring great talent and growing your business.

Get started today
Estonia risks illustration

Risks of misclassification

Like many other countries, Estonia treats self-employed individuals or contractors and full-time workers differently and there are risks associated with misclassification.


Employing in Estonia

Estonia adheres to labor principles laid down in the Estonian Constitution and the Conventions of the International Labor Organization, codified further in statutes like:

  • The Employment Contracts Acts
  • The Law of Obligations Act
  • The Individual Labour Dispute Resolution Act
  • The Occupational Health and Safety Act

Estonian labor regulations are liberal in principle but provide strong worker protections designed to safeguard workers’ rights in practice. Employees in Estonia enjoy protections against discrimination based on age, religion, sexual orientation, gender expression, and race.

Common questions that could come up during the hiring process may be about minimum wage, overtime rates, and paid time off. Remote can help you offer a complete, competitive, and compliant benefits package to your employees in Estonia.

Public holidays

Date Holiday Name Extra information
New Year's Day
Independence Day
Good Friday
Easter Sunday
Labour Day
Spring Day
Victory Day
Estonian Restoration of Independence
Christmas Eve
Christmas Day
2nd Day of Christmas

The Estonia government mandates a minimum wage and employers are expected to offer employees at least €584 per month, or €3.85 per hour for hourly work.

For customers of Remote, all employee payments will be made in equal monthly instalments on or before the last working day of each calendar month, payable in arrears.
We can help you get a new employee started in Estonia fast. The minimum onboarding time we need is often less than three weeks.

Our team ensures your employees are onboarded and paid as quickly as possible while keeping your business compliant with all local employment legislation. The minimum onboarding time begins after the employee submits all required information onto the Remote platform. The onboarding timeline is also dependent upon registration with local authorities.

For all non-nationals of the country of employment, the Right to Work assessment (if applicable) will add three extra days to the total time to onboard. There may be extra time required if we need to follow-up on the right to work assessment.

Please note, payroll cut-off dates can impact the actual first day of employment. Remote has a payroll cut-off date of the 10th of the month unless otherwise specified.


Competitive benefits package in Estonia

Remote can help you provide a competitive and compliant benefits package for your employees in Estonia. If you have questions or would like to offer a custom benefit, let us know and we can help.

  • benefits list
  • benefits list
  • benefits list
  • benefits list
  • benefits list
  • benefits list
  • benefits list
  • benefits list

Taxes in Estonia

Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in Estonia.

  • Employer

    • 13% - Health Insurance
    • 20% - Pension Insurance
    • 0.8% - Unemployment Insurance
  • Employee

    • 21% - Flat income tax rate
    • 1.6% - Unemployment insurance
    • 2% of gross salary – pension contribution (obligatory for employees born after 1983)

Types of leave

time off

Employees are entitled to 28 paid days off and should any of those leave days fall on a public holiday, the paid leave will be extended so employees are not shortchanged.


Employees are entitled to take the 13 national holidays off and employees who make themselves available on holidays are entitled to double pay.


Estonian labor law guarantees a maximum of 182 paid sick leave days per calendar year, paid at 70% of the employee’s average salary. This is paid by the employer from the fourth until the eighth day of the employee’s illness. The employee draws sickness benefits from the social security administration from the ninth day onwards.


Pregnant employees are entitled to 140 paid days off, which can start vesting at least 70 days before the delivery date. Maternity benefits are disbursed by the social security office.


An employee is entitled to paid parental leave to raise a newly-delivered child or to assist a postpartum partner, both at the expense of the state. Same sex couples are eligible if the child is adopted by the other parent. Paid parental leave can be taken until the child reaches the age of three. The parents can take up to 435 days of leave (this time can be either consecutive or not consecutive). Only one parent can take this leave at a time.


Men are entitled to 10 working days that can be taken within two months of the expected birth date. After the birth, the father is entitled to two months paternity leave. Men are entitled to 100% of their gross salary, however it is capped at three times the minimum wage of the country.


Working students can access 30 calendar days off for general education or vocational studies and are guaranteed 20 days of compensation for the time off taken.

  • Adoption leave: adopting parents are guaranteed paid leave to negotiate the adoption process and bond with their children.
  • Childcare leave: employees with children aged below 14 are entitled to up to 6 days of paid leave monthly, depending on the age of their children. Either parent of a disabled child can take an additional paid workday off every month until the child turns 18.


Termination process

A working relationship can be terminated in cases of gross employee misconduct, willful employee resignation, or a winding down of the relationship as prescribed in the employment contract.

Notice period

Depending on the duration an employee has worked with an employer, the latter should provide written notice to the employee well in advance of termination of the working relationship.

  • Less than 1 year of employment: at least 15 calendar days
  • 1 t0 5 years of employment: at least 30 calendar days
  • 5 to 10 years of service: at least 60 calendar days
  • 10 or more years of service: at least 90 calendar days

Severance pay

If a redundant employee is terminated, the employer should pay the average of the previous six months’ salary as severance pay.

Fixed-term employees are entitled to the wages for the remainder of the contract’s term if they’re terminated.

The situations where severance pay is triggered are outlined in Estonian employment legislation as follows:

  • Where the termination is due to redundancy, the employee is entitled to six months of salary
  • Employees who have been employed for five to 10 years are entitled to one additional month of gross salary
  • Employees who have been employed for 10 years or more are entitled to two additional months of gross salary
  • Employees with fixed term contracts that were terminated due to redundancy are entitled to the wages that they would have received until the date of termination of the contract

Probation periods

Probation periods can last up to four months but cannot exceed half of the term of an employment contract. That is, if an employment contract lasts for three months, the probation period cannot exceed six weeks.

An employer should provide notice at least 15 days before terminating a contract that’s still in the probation stage.

Employ World Half-circle

Build your team,
anywhere in the world.

Get started today