Currency CurrencyEuro (EUR) Working Time Work Week35 - 40 hours Employer Taxes Employer Taxes 33.8%

Hire in Estonia

Get the best talent in Estonia. Let Lano do the heavy lifting. We’ll help you hire the best full-time employees or contractors, saving you from the pain of establishing a legal entity. No need to worry about complex local laws or tax requirements. From compliant contracts to global payroll, we’ve got you covered. 

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Not only is Estonia amongst the most digitally advanced countries in the world but it also has attracted a large crowd of international talent over the past few years thanks to unbureaucratic visa regulations. Together with the country’s highly skilled workforce – 86% of which masters at least one foreign language – they form a vast pool of possible recruits companies can choose from when growing their global teams. 

According to the 2016 Human Capital Report, Estonia ranks 15th best country in the world when it comes to maximising human capital potential. So you can be sure to find the right talent to match your job vacancy.

Basic Facts about Estonia

  1. official state name Republic of Estonia (Eesti Vabariik)
  2. capital Tallinn
  3. population 1.33 million
  4. language Estonian
  5. currency Euro (EUR)
  6. time zone UTC +2
  1. Show public holidays
    01 Jan New Year
    24 Feb Estonian Independence Day
    02 Apr Good Friday
    04 Apr Easter Sunday
    01 May Spring Day
    23 May Whit Sunday
    23 Jun Victory Day
    24 Jun Midsummer Day
    20 Aug Restoration of Independence
    24 Dec Christmas Eve
    25 Dec Christmas Day
    26 Dec Second Christmas Day

Employment Contract

Employment contracts in Estonia can be either permanent or fixed-term – under the condition that the temporary nature of the work to be carried out by the employee can be proven. Regardless of the type of employment, the Estonian Employment Contract Act mandantes employment agreements to be in writing and contain at least the following basic information: 

  • Identification of both parties 
  • Date of commencement (and employment duration for temporary contracts) 
  • Workplace
  • Job description, duties and responsibilities
  • Basic salary as well as other compensation or benefits and payment details
  • Working hours 
  • Total number of holidays
  • Notice periods for employment termination
  • Reference to any applying collective agreements

Probation Period

Probation periods for indefinite employment contracts should not be longer than four months. For fixed-term contracts, trial periods should be shorter than half the period they are concluded for. Employees may receive a lower salary during their probationary period.

Working time

Working Hours and Breaks

According to Estonian labour law, a standard work week comprises 40 hours divided into five eight-hour days. In some professions and industries, standard working time is reduced to 35 hours per week and seven hours per day. 

Regardless of an employee’s total weekly working time, the following regulations on rest periods and breaks must be observed:

  • at least eleven hours of rest over a period of 24 hours
  • at least 30 minutes of break after six consecutive hours of work
  • at least 48 hours of rest within each working week – usually Saturday and Sunday


Any work exceeding an employee’s standard working hours is considered overtime and must be agreed upon by both employer and employee. Employees who are required to work overtime must receive either additional time off or be remunerated for their extra work at a rate of 150% of their usual hourly wages. Any work beyond a maximum of 48 hours per week, overtime included, is not permitted.


It is common practice to pay employees in Estonia once a month but employees and employers can agree on a shorter pay interval.

Minimum Wage

In January 2022, the national minimum wage in Estonia rose to EUR 654 per month, i.e. EUR 3.86 per hour.

Sick Pay

An employee who is unable to work because of sickness or injury is entitled to sickness benefits starting from the fourth day of absence. While the employer is obligated to provide normal pay from the fourth to the eighth day of sickness, any further day – up to 182 calendar days – is covered by the health insurance fund at a rate of 70% of the employee’s normal wages.


There are no legal provisions for a 13th salary but some companies offer their employees an annual bonus.

Taxes and Social Security Contribution

Employers and employees in Estonia are subject to the following tax and social security contribution rates (as of 2022):


20% corporate tax rate

20% VAT (standard rate)


Individual income is taxed at a flat rate:


social security

33.8% of employee’s salary including:

20% public pension scheme

13% public health insurance

0.8% unemployment insurance


3.6% of employee’s salary including:

2% public pension scheme

1.6% unemployment insurance

Employee Benefits

Annual Leave

All employees have the right to at least 28 calendar days, i.e. four weeks, of paid annual leave. In addition, there are twelve public holidays in Estonia on which businesses usually remain closed.

Maternity Leave and Paternity Leave

Female employees are entitled to 140 calendar days of maternity leave – extendable to 154 days in case of multiple births – of which up to 70 days can be taken prior to the expected due date. During this period, they receive maternity benefits equal to their normal salary from the Estonian health insurance fund. 

Starting from 1 July 2020, fathers can claim up to 30 calendar days of paid paternity leave. The employer continues paying the father’s normal salary but can then claim reimbursement from the state. Adoptive parents receive 70 calendar days of adoption leave for each adopted child aged younger than ten.

Parental Leave

Mothers and fathers are allowed to take parental leave until their child is three years old. However, it is only possible for one parent at the time to take childcare leave. Parental leave benefits are paid for up to 435 days.

Additional Leave and Benefits

On top of the leave entitlements mentioned above, Estonian law provides for the following types of leave:

  • study leave: unpaid time off can be taken in order to prepare for and take exams
  • childcare leave: three to six days of leave per year, depending on the number of children aged younger than 14, and one day per month for disabled children, both of which are remunerated at the level of the national minimum wage; in both cases, employers can grant an additional ten days of unpaid leave

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Employment termination

In addition to employment termination by default – i.e. in case of a fixed-term contract – resignation and mutual agreement, employee’s may be dismissed due to one of the following reasons (non-exhaustive list):

  • redundancy or other business-related reasons
  • summary dismissal due to gross misconduct
  • breach of employment contract
  • constant underperformance
  • employee’s long-term illness – under certain conditions the employment may be terminated after four months of sickness-related absence from work

When terminating an employee, employers have to respect statutory notice periods which depend on the employee’s length of service:

  • less than one year of service (including probationary period) = 15 days
  • one to five years of service = 30 days
  • five to ten years of service = 60 days
  • more than ten years of service = 90 days

Pay in lieu of notice is also possible. Employees wishing to resign from their position have to give notice to their employer 30 days prior to the intended end date. 

Severance payments equal to one month’s salary only have to be provided in cases where the dismissal is due to redundancy. However, employees whose length of service exceeds five years can claim the equivalent of one month’s salary – two months’ salary for more than ten years of service – from the unemployment insurance fund.

Hiring in Estonia?

Not sure if you should start with a contractor or go ahead and hire a full-time teammate in Estonia? The Lano platform makes it easy to go from freelance to full-time employee. Get expert guidance from the Lano team to compare your options and keep growing.