Hire and pay employees in
Estonia, hassle-free

With Deel, your business can easily hire employees in Estonia. No more worrying about local laws, complex tax systems, or managing international payroll. Deel takes care of everything in 150+ countries.

The average onboarding time frame in Estonia is 3 days with Deel.

Currency

Euro (EUR)

Capital

Tallinn

Official Language

Estonian

Payroll Cycle

Monthly

Onboard, pay and manage employees in Estonia with Deel.

Usually, to hire in Estonia, your business needs an entity. That means a local office, an address registered as a subsidiary, and an account with a local bank. All of this, plus navigating regional benefits, payroll, tax, and HR laws, can take months.

Deel lets you hire employees in Estonia quickly, easily, and compliantly. We even automate tax document collection, payroll, benefits, and more. For your existing direct employees, we can manage your entire payroll operation from end-to-end.

Download the Guide

All the necessary benefits for Estonia
built right in

Deel allows you to provide localized benefits for employees in Estonia within minutes. All in one manageable online dashboard.

  • Unemployment Insurance
  • Private Healthcare - Unisure (optional)
  • Private Healthcare - Allianz (optional)

Our quickstart guide to hiring in Estonia

Navigate the tabs below to learn everything you need to know about hiring an employee in Estonia

Minimum Wage Requirements

The minimum wage is EUR 820 per month.

Individual Income Tax

The individual income tax rate is 20% in Estonia. Income tax is calculated using a flat rate. The rate may vary depending on when an employee’s pension fund and unemployment insurance deductions are made.

Payroll Cost

The employer cost is generally estimated at 33.8% of the employee salary.

  • Social security tax - 33.0%
  • Unemployment tax - 0.8%

Other costs:

  • Medical check (onboarding and to be repeated every three years) - EUR 160  

These costs are provided as estimates and are intended solely for general informational purposes. To fully comprehend all associated costs and fees related to the terms of any employment agreement for this country, please contact our Sales team for a quote.

Overtime Pay & Maximum Hours

Standard working hours are 8 hours per day, 40 hours per week. The standard work week is from Monday to Friday.

Overtime payment is mandatory. Hours outside of standard work hours are considered overtime. Normally, full-time employees can work a maximum of 8 hours of overtime a week, for an average of 48 working hours per week. In agreement with the employee, the employee can work 12 hours of overtime a week, for an average of 52 working hours per week as a full-time employee. 

Maternity Leave

Pregnant employees are entitled to up to 100 consecutive calendar days of maternity leave, including the child’s estimated date of birth.
Employees can use the maternity benefit up to 70 calendar days before the child’s estimated date of birth and 30 calendar days after the child’s estimated date of birth. The Social Insurance Board is responsible for this pay.

Paternity Leave

Employees are entitled to 30 calendar days of paid paternity leave. 

The employee will receive 100% of their average salary during this period (up to a maximum of three times the Estonian mean gross wages), and The Social Insurance Board will be responsible for this pay. 

The benefit can be used until the child turns 3 years old. 

The employee can extend leave using parental leave.

Parental Leave

Employees are entitled to 60 days of parental leave. Both parents can decide how to distribute the time off and can take the leave at the same time. The Social Insurance Board will pay salary during this period.
The parental benefit amount is calculated separately for each recipient, depending on their previous income.
The amount depends on the amount of paid social tax declared for their earned income (in 2023 the maximum parental benefit is EUR 4.231,29 gross per month).
Parental leave can't be extended.

Sick Leave

Employees are entitled to 182 days of sick leave in the event of disease or illness (except tuberculosis).
The first day is unpaid and considered as a qualifying period. In the event of a disease or injury, an insured person has the right to receive sickness benefits until the date on which their workability is restored (as specified in the certificate for sick leave).
Employees are eligible for 240 consecutive calendar days of sick leave in the event of tuberculosis.
Check this link for more information

Period Pay Payer
Day 1 0% Qualifying period
Day 2 - 5 Based on employee's average salary for the last 6 months (Average 70%) Employer
Day 6 onwards Based on the amount of social tax calculated or paid for the employee for the previous calendar year Estonian Health Insurance Fund (EHIF)

Termination Requirements

Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.

Terminations in Estonia can be complex. There is no at-will termination in Estonia for employers, outside the probation period, and termination must be done for just cause.

Compliant terminations include:

  • Voluntarily by the employee
  • By mutual agreement
  • Unilaterally by the employer based on if the employee:
    • Commits misconduct and breach of contract
    • Becomes bankrupt
    • Becomes of unsound mind
    • Is convicted of any criminal offense, prior to or in the course of employment
    • Fails to disclose in the employee’s resume any previous disciplinary or legal action taken against the Employee
    • Is permanently incapacitated by accident or ill health; unable to perform job duties
  • By the expiration of the contract

Notice Period

In Estonia, the notice period is based on the length of the labor relationship.

  • Up to 1 year of employment - minimum 15 calendar days
  • Between 1 - 5 years of employment - minimum 30 calendar days
  • Between 5 - 10 years of employment - minimum 60 calendar days
  • 10+ years of employment - minimum 90 calendar days

Severance for Employees

In Estonia, severance is paid based on the reason for termination.

Reason for termination Severance Pay
Lay-off 1 month’s average salary
Breach of contract by the employer 3 month’s average salary
Employer ending a fixed-term contract for economic reasons Compensation that the employee would be entitled to until the expiry of the contract term

 

To protect you from unforeseen financial risks arising from terminations, Deel applies a Severance Accrual to all employment agreements in this country.  Deel has extensive expertise in managing litigation risk globally and our Severance Accrual calculation is based on the prevailing common-law or statutory entitlements and local best practices. In the event your employee resigns or is not entitled to severance, all unused amounts will be returned to you.

Paid Time Off

Both full-time and part-time employees are entitled to 28 calendar days of paid time off (PTO) a year. PTO accrues monthly at 2.33 days per month. Employees are eligible for annual leave for the time worked thus far. 

Public Holidays

Estonia celebrates 12 national holidays. National holidays include:

  1. New Year's Day
  2. Independence Day, anniversary of the Republic of Estonia
  3. Good Friday
  4. Easter Sunday
  5. Spring Day
  6. Pentecost
  7. Victory Day
  8. Midsummer Day
  9. Day of Restoration of Independence
  10. Christmas Eve
  11. Christmas Day
  12. Boxing Day

Onboarding

3 business days after MSA signature & deposit payment.

Employment Contract Details

Contracts must be in Estonian, or English and can be bilingual. They must be in writing and signed by both parties.

A contract must include:

  • Name
  • Personal identification or registry code
  • Residence or seat of the employer and the employee
  • Validity of contract
  • Probation period
  • Job description and job title
  • Working hours
  • Place of work
  • Remuneration
  • Obligations of the parties
  • Vacation
  • Termination conditions

Probation Period

Probation periods are not mandatory. There is no minimum probation period. The maximum probation period is 4 months.
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Hiring in Estonia, hassle-free

With Deel, your business can easily hire employees in Estonia with our EOR solution. If you have an entity, our Global Payroll solution takes care of payroll and compliance for your direct employees. Our 250+ in-house experts handle everything from managing local laws, complex tax systems, or your payroll in Estonia and 150+ countries.

Group (8)

Starting at 599 USD

Management fee

Group (9)

33.8%

Estimate Employer Cost

*of employee salary

Want to learn the cost of hiring an employee in Estonia?

View our Employee Cost Calculator
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