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.
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 654 per month.
From 2023 onwards, the minimum wage is EUR 725 gross.
Individual Income Tax
The employer cost is generally estimated at 33.8% of the employee salary.
- Social security tax - 33.0%
- Unemployment tax - 0.8%
- Medical check (onboarding and to be repeated every three years) - EUR 160
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. Employees can work a maximum of 8 hours of overtime per week. For additional hours, employees are paid 1.5 times their regular salary or can be compensated with additional PTO.
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.
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.
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.
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
|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)|
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
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
Estonia celebrates 12 national holidays. National holidays include:
- New Year's Day
- Independence Day, anniversary of the Republic of Estonia
- Good Friday
- Easter Sunday
- Spring Day
- Victory Day
- Midsummer Day
- Day of Restoration of Independence
- Christmas Eve
- Christmas Day
- Boxing Day
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:
- 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
- Obligations of the parties
- Termination conditions
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.
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