Hidden Gems
Estonia
Min. wage
(x12 payments)
€946 /mo
About the minimum wage
Employer tax
~33.8%
Understand employer tax
Annual leave
28 days
Learn about annual leave
Notice period
15-90 days (by tenure)
Termination and notice info
Updated
Nov 2026
The default and most common employment relationship in Estonia; has no fixed end date and continues until lawfully terminated by either party under the Employment Contracts Act (redundancy, employee-caused grounds, incapacity, or resignation).
Permitted only for temporary work (e.g., seasonal or project-based work) or to replace a temporarily absent employee, or other grounds set by law/collective agreement. Maximum total duration is 5 years; if the same temporary need continues beyond that (or lacks valid justification for successive renewals), the contract is deemed converted to an indefinite-term contract.
Standard full-time schedule is 8 hours/day, 40 hours/week (typically Mon-Fri). Average weekly time is capped at 48 hours over a 4-month reference period (extendable to 52 hours by written agreement). Overtime requires the employee's consent and is paid at a minimum of 1.5x the regular wage (or compensated with equivalent time off); night work (10pm-6am) attracts a 1.25x premium unless already factored into pay; work on public holidays is paid at 2x.
Employers may set a probationary period of up to 4 months (no statutory minimum, and it can be waived). Either party may terminate during probation with 15 calendar days' notice; an employer terminating for unsuitability must state that the employee's health, knowledge, skills, abilities, or personal qualities do not fit the role, but need not follow the full redundancy/severance procedure. Discriminatory or retaliatory termination remains prohibited even during probation.
Estonia has no statutory requirement for a 13th or 14th month salary. Any year-end, holiday, or performance bonus is discretionary or governed solely by the individual employment contract or a collective agreement.
None. Estonia has no general statutory job-title/classification system for private-sector roles; only specific regulated professions (e.g., medicine, law, certain financial/audit roles) require licensing or registered titles.
Employer-paid social tax is 33% of gross salary (20% funds state pension insurance, 13% funds state health insurance), subject to a monthly minimum obligation based on the minimum wage (EUR 292.38/month in 2026 per full-time position, with some exemptions). Employers additionally pay an unemployment insurance premium of 0.8% of gross salary. Combined statutory employer cost: ~33.8% of gross pay.
Employees pay an unemployment insurance premium of 1.6% of gross salary plus a mandatory funded (II pillar) pension contribution, default 2% of gross salary (employees may elect 2%, 4%, or 6%); the state tops up the pension fund with an additional 4% sourced from the 33% employer social tax. Combined default employee statutory contribution: ~3.6% of gross pay (excludes the separate flat 22% personal income tax withheld from wages).
In addition to statutory leave, employees are entitled to the following statutory benefits:
Estonia funds pensions, state health insurance and unemployment benefits mainly through an employer-paid social tax and unemployment insurance premiums, supplemented by a mandatory funded pension contribution from employees.
Estonia does not run a separate mandatory workers' compensation insurance scheme; work-related injuries and occupational diseases are covered through the general state health insurance system (funded via the 33% social tax) plus employer liability under the Occupational Health and Safety Act.
Employers must investigate workplace accidents, maintain safe working conditions, and can be held liable for damages (medical costs, lost income, compensation) where an accident or illness results from a breach of health-and-safety obligations. Many employers carry supplementary private accident/liability insurance, though this is voluntary rather than a mandated state scheme.
Statutory severance is payable by the employer when a contract is terminated for redundancy (economic/organizational reasons) or the employee's long-term incapacity for work, calculated by length of service:
If the employer is insolvent, the Estonian Unemployment Insurance Fund (Töötukassa) may cover unpaid severance and wage claims up to statutory limits. No severance is due for termination for cause (misconduct) or during probation.
Estonia has no legal requirement for a 13th or 14th month salary. Any additional year-end or holiday bonus is entirely at the employer's discretion or governed by a collective agreement or individual employment contract — it is not mandated by the Employment Contracts Act.
P.S. our team speaks multiple languages and we'd love to chat in your preferred language if requested.
Your employee's hours, time off, holidays, bonuses, and commissions are automatically calculated into payroll. RemoFirst will invoice you in either US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), Australian Dollars (AUD), or Singapore Dollars (SGD) around the 15th of each month to make sure your employees are paid on time. To make it even easier, you can summarize your entire global team's salaries to aggregate them into one payment (instead of many individual payments).
Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.
Whenever the employee or employer has a question about, or anything else related to international employment, they can speak with our customer support team to get answers from our team of experts.
