Remote’s guide to employing in Estonia.
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.
1,329,460 (est. 2021)
Ease of doing business
Cost of living index
$$$ (47 of 139 nations)
VAT - standard rate
GDP - real growth rate
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.
Estonia adheres to labor principles laid down in the Estonian Constitution and the Conventions of the International Labor Organization, codified further in statutes like:
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.
|Saturday, January 1, 2022||New Year's Day|
|Wednesday, February 23, 2022||Working day 3 hours shorter|
|Thursday, February 24, 2022||Independence Day|
|Friday, April 15, 2022||Good Friday|
|Sunday, April 17, 2022||Easter Day|
|Sunday, May 1, 2022||Spring Day|
|Sunday, June 5, 2022||Whit Sunday|
|Wednesday, June 22, 2022||Working day 3 hours shorter|
|Thursday, June 23, 2022||Victory Day|
|Friday, June 24, 2022||Midsummer Day|
|Saturday, August 20, 2022||Day of Restoration of Independence|
|Friday, December 23, 2022||Working day 3 hours shorter|
|Saturday, December 24, 2022||Christmas Eve|
|Sunday, December 25, 2022||Christmas Day|
|Monday, December 26, 2022||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 installments 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 only 14 working days.
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.
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.
Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in Estonia.
13% - Health Insurance
20% - Pension Insurance
0.8% - Unemployment Insurance
21% - Flat income tax rate
1.6% - Unemployment insurance
2% of gross salary – pension contribution (obligatory for employees born after 1983)
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.
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.
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.
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:
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.