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How to hire and pay employees in Estonia

Map pin in green circle

Estonia Facts and Stats

Currency

Euro is the official currency of Estonia. Its currency symbol is EUR.

Employer Costs

Estimated at 33.8% of employees salary

Languages

Estonian is the official language of Estonia.

Population

The population of Estonia is 1.3 Million

Payroll frequency

Employees are paid monthly

Hiring

Grow your team in Estonia

No entity, no problem

To start growing your team in Estonia, you must establish a local entity – including an account with a local bank, a local office and an address registered as a subsidiary. This allows you to manage payroll, tax, benefits and compliance for your employees, but can take several months. Emerald can hire and payroll your workers quickly and compliantly with their ‘ready to go’ entity. Make growing your team simple with Emerald as a global partner.

Emerald can hire and payroll your workers, quickly and compliantly with their ready to go entity. Make growing your team simple with Emerald as a global partner.

Pros & Cons of hiring in Estonia

Hiring employees in Estonia offers several notable advantages due to the country’s strong educational and technological landscape. Estonia boasts a highly trained workforce, with 86% of employees proficient in at least one foreign language, facilitating smooth communication and integration in global teams. As one of the most technologically advanced countries worldwide, Estonia provides an employer access to a highly educated, tech-savvy, and innovative talent pool. Additionally, Estonia’s progressive visa regulations make it easier for international talent to work in the country, thanks to a relatively relaxed process, especially for EU Citizens for whom work permits are easy to obtain. However, potential challenges include higher salary expectations due to the country’s strong educational background and the potential cultural and time zone differences when managing remote teams. Overall, the benefits of Estonia’s skilled workforce and favourable visa policies make it an attractive option for hiring, despite the few challenges.

Why Estonia is good for remote workers

Employers should consider hiring remotely in Estonia for several compelling reasons. The country offers a workforce that is not only highly educated but also adept at leveraging advanced technology, ensuring efficient and productive remote work. Estonia’s strong emphasis on innovation means that employees bring creative solutions and cutting-edge skills to the table. Additionally, Estonia’s streamlined administrative processes make it easier to onboard international talent, reducing the complexity and time involved in hiring remote workers. Overall, Estonia provides a robust and efficient environment for remote employment, combining expertise with ease of integration.

Start growing your remote workforce now

Employer Costs
Pension20%
Health Insurance13%
Unemployment Insurance0.8%
Benefits

Mandatory Benefits

Health allowance

Car allowance

Phone allowance

Employment

Probation

The probationary period in Estonia is limited to a maximum of four months.

Emerald Technology can onboard employees in Estonia within 48 hours.

Insurance
01.

Health Insurance

The Health Insurance Fund ensures residents have access to essential healthcare services and it is funded by employers’ social tax contributions, and it covers employees in which employers pays their social tax on their behalf, self-employed persons, if they make their own contributions to the fund and qualifying residents, such as dependents and students.

02.

Social Security Contributions

Leave Policy
01.

Maternity Leave

Female employees are entitled to 70 days leave before birth, and 100 days post-birth. During the 70-day period, maternity benefit is paid by the Social Insurance Board.

02.

Paternity Leave

03.

Paternity Leave

04.

Sickness Leave

Emerald Technology can onboard employees in Estonia within 48 hours.
Termination

Resignation and Dismissal

When an employer dismisses an employee it must be with just cause and they must give them notice. The notice period starts from the day after the employer notifies the employee of the termination. Notice must be given in accordance with the following schedule at a minimum:

Length of service

Notice Period

> 1 year

15 days minimum

1-5 years

30 days minimum

5-10 years

60 days minimum

10+ years

90 days minimum

Severance

If an employee is made redundant, they are entitled to a payment based on years of continuous service.

In the event of employment termination due to redundancy, the employer is required to pay compensation equivalent to one month's average wage, calculated based on the employee's earnings over the previous six months.

If a fixed-term contract is cancelled due to redundancy, the employer must compensate the employee an amount corresponding to the wages they would have earned until the contract’s expiry date.

No compensation should be paid if the contract ends via ‘force majeure’ or unforeseen circumstances
Time off

Statutory Time off

Employees are entitled to 28 days of annual leave

Public Holidays

Public Holidays
New Year’s Day
Independence Day
Good Friday
Easter Sunday
Spring Day
Whit Sunday
Victory Day
Midsummer Day
Independence Restoration Day
Christmas Eve
Christmas Day
2nd Day of Christmas

Emerald Technology can onboard employees in Estonia within 48 hours.
Salary / Taxes

Work, Pay and Taxes

01.

Minimum Wage

Employees are entitled to 820 EUR/ month

02.

Working time and Overtime

03.

Salary Payments

04.

Bonus

05.

Income Tax

Group 1977

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