Hire employees in Estonia No entity needed.
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.
Estonia also treats contractors differently than full-time employees, so misclassifying a contractor could lead to fines. Deel lets you hire employees in Estonia quickly, easily, and compliantly. We even automate tax document collection, payroll, benefits, and more.
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.
- Health Insurance
- Unemployment Insurance
Currency: Euro (EUR)
Official language: Estonian
Payroll Cycle: Monthly
Paid Time Off
In Estonia, employees are entitled to 28 calendar days of paid holiday a year.
- New Year’s day
- Independence Day
- Good Friday
- Easter Sunday
- Spring Day
- Pentecost or Whit-Sunday
- Victory Day
- Midsummer Day
- Restoration Independence Day
- Christmas Eve
- Christmas Day
- Boxing Day
Individual Income Tax
The Individual tax rate in Estonia is 20% flat.
Approximately, 33.8% of employee salary.
Employment Contract Details
Employment contracts must be in writing.
The maximum probation period is 4 months.
Minimum Wage Requirements
The Minimum Wage is EUR 584 per month.
Maximum working hours and overtime
For a full time employee, the standard is 8 hours a day, and 40 hours a week.
Bonus and expense payments
It is common practice to award bonuses to employees in certain industries. Terms and conditions are determined by the parties
Parental leave is paid by the government and can be extended until the child turns 3 years old. Child care leave (extended parental leave) can be taken by one parent at a time. The amount of parental leave taken by each employee can be granted in parts and they need to notify the employer 14 days in advance.
- Maternity Leave: employees are entitled to 140 days of maternity leave, which can begin at least 70 days before childbirth. Employees can obtain a compensation for pregnancy and maternity leave in accordance with the Health Insurance Act.
- Paternity Leave: best practice is to grant employees 30 days. However, the employer must ensure at least 7 days of paid leave. This may be splitted between childbirth and until the child turns 3 years old. The employee can apply for Family Benefits Act benefit.
In Estonia, the employer will pay the employee will pay the leave until the 8th day. After this period, Estonian Health Insurance fund (EHIF) pays the benefit. The employee will need to present an electronic incapacity for work certificate system which enables the physician and the employer submit the data to the EHIF database electronically.
Termination requirements for employees in
Employees are entitled to 1 month's average wages due to lay-off dismissal. An employee also has the right to receive an insurance benefit under the Unemployment Insurance Act.
In Estonia, the notice period is based on the length of the labor relationship:
- Up to 1 year of employment - 2 weeks’ notice
- 1 - 5 years of employment - 1 month’s notice
- 5 - 10 years of employment - 2 months’ notice
- 10+ years of employment - 3 months’ notice
Employees who wish to terminate the employment contract must give the employer a minimum of 1 month’s notice.
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