Your Guide to Hiring Employees and
Contractors in Estonia
Capital city
Tallinn
Currency
Euro
Language(s)
Estonian
Ease of doing business
Very easy
Payroll frequency
Monthly
Employer taxes
33.80%
Payroll
Monthly Payroll
The payroll cycle in Estonia is generally monthly, and payments must be made on the same day of the month and no later than the last working day of the month.
Minimum Wage Requirements:
The minimum wage is EUR 654 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.
Employer Cost:
The employer cost is generally estimated at 33.8% of the employee salary.
Social security tax – 33.0%
Unemployment tax – 0.8%
Working Hours
Work Week
Monday to Friday.
Overtime Pay & Maximum Hours
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.
Employment Termination
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.
Notice period:
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.
Probation periods
An employer should provide notice at least 15 days before terminating a contract that’s still in the probation stage.