* Playroll continues to analyse immediate opportunities and fulfilled roles by recruitment partners, contractors and employers to identify in-demand jobs.

Capital City

Euro (€)



Employment Cost


Annual Leave

28 days

In-demand Specialties*
Financial Services, Information Technology, Technical Services

The Ultimate Guide to Hiring Employees in Estonia

Simplify hiring employees in by partnering with Playroll. Our Employer of Record (EOR) handles hiring, onboarding, payroll, taxes, immigration, benefits administration, and compliance. While you maintain control of day-to-day tasks and responsibilities.


Key Considerations Before Hiring In Estonia

Employing in Estonia requires employers to own a legal entity in the country and manage payroll, tax, benefits and compliance through their own in-country resources. Grow your team in Estonia with our Employer of Record solution, ensuring streamlined, compliant business expansion with no entity.

Playroll allows you to hire employee's in Estonia quickly, easily and we even automate tax document collection, benefits, payroll and more.

Good To Know

Estonia boasts a highly trained workforce, with 86% of them proficient in at least one foreign language.

Estonia is recognized as one of the most technologically proficient countries globally. Hiring remote employees from Estonia provides access to a highly educated, tech-savvy, and inventive workforce.

According to the 2016 Human Capital Report, Estonia is ranked 15th globally for maximizing human capital potential, indicating a strong talent base.

The country has attracted a significant number of foreign talents in recent years, partly due to lenient visa requirements. Estonia's visa regulations are described as unbureaucratic, making it easier for international talent to work in the country.


Fundamental Aspects of Employment in Estonia

In Estonia, employment contracts may take the form of either permanent or fixed-term arrangements, provided that the temporary nature of the work is demonstrable. Irrespective of the employment type, the Estonian Employment Contract Act stipulates that written agreements must encompass, at a minimum, the following essential details:

  • Identification of both contracting parties
  • Commencement date
  • Comprehensive job description, inclusive of duties and responsibilities
  • Basic salary, along with any additional compensation or benefits, and specifics regarding payment

Probationary Period in Estonia

The probationary periods for employment in Estonia are limited to a maximum duration of four months.

Working hours in Estonia

The standard work week consists of 40 hours, typically distributed as 8 hours per day over a five-day work week.

Overtime in Estonia

Any work conducted beyond the standard 40 hours per week is considered overtime. The regulation and compensation for overtime are typically outlined and governed by the terms specified in employment contracts or collective agreements.

Navigating Key Aspects of Payroll in Estonia

Estonia has a robust and complex payroll and tax system, and as an employer, it pays to understand payroll process basics.

1 January- 31 December

Fiscal Year in Estonia

1 January- 31 December is the 12-month accounting period that businesses in Estonia use for financial and tax reporting purposes.

Payroll Cycle in Estonia

The payroll cycle in Estonia is usually monthly, with employees being paid on or before the last date of the month.
4.30 EUR p/h

Minimum Wage in Estonia

The minimum wage for employees in Estonia is typically 4.30 EUR per hour, amounting to ~725 EUR per month for a typical 40 hour work week.

Minimum wages and salaries in Estonia

The national minimum wage is 725 EUR per month and 4.30 EUR per hour.

Bonus Payments in Estonia

Employers aren't required to give a 13th-month salary, but it's common to receive annual bonuses.

Comprehensive Overview of Employment Taxes in Estonia

Understanding the tax obligations for both employers and employees is crucial when operating in Estonia's business landscape. This section explains how taxes and statutory fees affect payroll and individual earnings in Estonia.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 33.8% on top of the employee salary in Estonia.

Tax Rate Tax Type

Employee Payroll Tax Contributions

In Estonia, the typical estimation for employee payroll contributions cost is around 1.6% – 3.6%.

Tax Rate Tax Type

Individual Payroll Tax Contributions

In Estonia, there's a flat tax rate of 20%, along with a tax-free minimum of up to 654 EUR per month. However, this exemption decreases as income rises, and it reaches zero when the annual gross income exceeds 25,200 EUR or 2100 EUR per month.

Tax Rate Income Bracket

Pension in Estonia

Estonia's pension system consists of three pillars: the State Pension (Pillar I) based on solidarity, the Compulsory Funded Pension (Pillar II) with a 20% employer contribution, and the Supplementary Funded Pension (Pillar III) for optional pension enhancement. State pensions are available to individuals aged 63 and nine months with 15 years of service, offering various options including early-retirement and deferred pensions.

The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Estonia tailored to your needs.

Easily navigate payroll, taxes and contributions with Playroll.

Grow your distributed workforce today!

Understanding the Protocols for Termination of Employment in Estonia

When it comes to terminating employment in Estonia, understanding the legal obligations regarding severance pay and contributions is essential. Below is a detailed overview of the key considerations for both employers and employees.

Termination Process

In Estonia, employers have the authority to terminate a fixed-term contract for various reasons, including:

  • Business needs
  • Employee misconduct
  • Is permanently incapacitated by accident or ill health; unable to perform job duties
  • Personal reasons

Notice Period

The duration of notice an employer must provide to an employee before terminating the working relationship depends on the length of the employee's service:

  • Less than 1 year of employment: At least 15 calendar days' notice.
  • 1 to 5 years of employment: At least 30 calendar days' notice.
  • 5 to 10 years of service: At least 60 calendar days' notice.
  • 10 or more years of service: At least 90 calendar days' notice.

Severance Pay

If an employee's contract is terminated due to redundancy, the employer must provide severance pay, equal to one month's salary based on the average earnings of the past six months. Additionally, employees with 5 to 10 years of service receive one extra month's salary from the unemployment insurance fund, and those with 10 or more years of service get an additional month's salary from the same fund.

Annual Leave Entitlements and Company Policies in Estonia

The annual leave entitlement in Estonia is 28 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays in Estonia

Employees have the right to take national holidays off. These holidays include:

Holiday Date

Paid Time Off in Estonia

Maternity Leave in Estonia

Paternity Leave in Estonia

Sick Leave in Estonia

Parental Leave In Estonia

Estonia's Benefits Built Into Playroll

Competitive benefits package in Estonia

Playroll is committed to providing tailored, competitive benefits packages that are designed not only to attract but also retain top talent worldwide. Our global team of benefits experts build custom local packages to ensure your employees in Estonia's needs are met. Typically our packages contain some or all of the following benefits.

Health Insurance
Pension or 401k
Life and Disability Insurance
Vision Insurance
Dental Insurance
Discounts & Perks

Playroll Supplementary Benefits For Employment In Estonia

Make your benefits package in Estonia a talent magnet with Playroll's local plans. We offer benefits that are compliant, comprehensive, and flexible — all at competitive rates. Speak with our local territory experts to explore the localized benefits we can offer you, while you scale your team.

Statutory benefits for employment in Estonia

In Estonia, there are three types of social security that employers, including non-residents with operations in Estonia, must contribute towards:

  • Public Pension
  • Health Insurance
  • Unemployment Insurance

Playroll allows you to provide localized benefits for employees in Estonia within minutes. All in one manageable online dashboard. If you'd like specific information about our benefits packages in Estonia create an account or contact our global expansion team, today.

Playroll Benefit Services

Playroll's Expertise in Facilitating Work Visas for Estonia

At Playroll we're all about empowering employees to work anywhere, making mobility possible for global teams. We sponsor visas and hire the employee for you, so you don’t have to worry about payroll, taxes, and more.

It's important to note, visa support can be complicated. There are many variables that affect whether sponsorship is possible, including one’s nationality, education, marital status, and the immigration policy for the country in question.

Unfortunately, this means we can’t support visas everywhere - with that being said, we handle the entire visa process in-house, and dig into your situation to give you an overview of what to expect if we're able to help with visa sponsorship in Estonia.

Playroll Immigration Support

Integrated EOR Platform

Legal and compliance experts are readily available to provide guidance and case-by-case Q&A support.

Accelerated Immigration Timeline

By leveraging dedicated support from in-house legal and compliance experts for case by case questions and more.

Hire in 50+ Countries

Accelerated Immigration Timeline

Acquiring a visa without an entity has never been easier, leverage Playroll's global coverage to sponsor and hire employees.

Playroll Visa Services

Hiring International Employees is Complex.

Playroll makes it easy!