An Overview of Employing in Estonia

Salary currency

Euros (€)

Salary Pay Date

Employees should be paid monthly on a date agreed by the employer.


The minimum wage for full time workers in Estonia is €654 per month (2022)
There are no mandatory increases to salaries; pay scales and increases are at the discretion of the employer.


There is no statutory bonus in Estonia.Any supplementary bonuses should be outlined in the contract of employment.

Social Security System

Social security in Estonia is governed by the Ministry of Social Affairs (Sotsiaalministeerium), which oversees the three contributory social security schemes:

  • The Social Insurance board (Sotsiaalkindlustusamet) manage all funds related to pension, family and social benefits;
  • The Health Insurance Fund (Eesti Haigekassa) covers medical care, sickness and maternity leave benefits;
  • The Unemployment Insurance Fund (Eesti Töötukassa) is responsible for all issues relating to unemployment and redundancy benefits.

Public healthcare is funded by the Health Insurance Fund scheme and is provided by the national health system. The Fund signs annual contracts with medical providers and covers the cost for medical expenses of insured employees. Employees are able to access the healthcare scheme following completion of their first month of employment.

Estonian citizens will incur minimal fees for some outpatient treatments and consultations.

Employer’s Costs

Employers are required to pay monthly contributions to the Tax Board (Maksuamet)

Social Tax (pension and health insurance)
0 – 2%*
Unemployment Insurance

*Employees born after 31st December 1982 are obliged to pay a mandatory pension contribution of 2%. This contribution is voluntary for anyone born prior to this date.

An Overview of the Main Statutory Benefits


Estonia has a three-tier pension system available to employees: state pension, mandatory funded pension, supplementary funded pension.

The state pension is available to employees upon reaching retirement age who have worked in Estonia for a minimum of 15 years.

The mandatory pension is available to all employees who have made monthly contributions to the Social Tax. This contribution is mandatory for all employees born from 1st January 1983. Employees contribute 2% of their gross monthly salary towards a selected pension fund and an additional 4% will be added by the State. Employees born prior to this date can opt to pay The supplementary pension is made in the form of voluntary contributions or a pension contract with a life insurance scheme.


Employees are entitled to sick leave benefits in the event of illness, workplace accidents or injury upon presentation of a medical certificate.

Sick leave entitlement begins from the second day of illness. The second to the fifth day of leave are paid by the employer and any subsequent leave is paid by the Estonian Health Insurance Fund. An insured employee has the right to receive sickness benefit for 182 consecutive calendar days.

The sickness benefit is paid at a rate of 70% average income in the six months prior to leave.
For a workplace accident, the employee may be entitled to up to 100% of their average salary based on the assessment of a medical panel.

Maternity & Paternity Leave

A pregnant employee is entitled to up to 140 calendar days of pregnancy and maternity leave, which can begin up to 70 days prior to the estimated due date.

A medical professional will issue a maternity certificate which must be presented to receive maternity pay.

Women are entitled to 100% pay for the duration of their maternity leave, funded by the Estonian Health Insurance Fund (Haigekassa).

Paternity leave of up to 30 days may be granted until the child reaches the age of three. Paternity benefit is paid by the employer and is compensated based on the average wage, up to a maximum of three-time Estonian mean gross wages. The employer has the right to submit an application to the Social Insurance Board for compensation of paternity benefit.

Additional Leave

Unpaid Parental Leave: a mother or father may take up to 10 days’ unpaid leave to care for a child under the age of fourteen.

Academic Leave: employees are entitled to up to 30 days’ leave for job-related training and education. Up to 20 academic leave days are payable by the employer at a rate equal to the employee’s average daily pay.

Contractual Provisions

Contract of Employment

Public healthcare is funded by the Health Insurance Fund scheme and is provided by the national health system. The Fund signs annual contracts with medical providers and covers the cost for medical expenses of insured employees. Employees are able to access the healthcare scheme following completion of their first month of employment.
Estonian citizens will incur minimal fees for some outpatient treatments and consultations.

Rules of Registration

A medical examination should be carried out within the first four months of employment and reviewed every three years, or sooner if advised by a doctor.

It is a legal requirement for employers to provide a new employee with a full overview of the workplace rules and guidelines, including health and safety procedures.

Probationary Period

Employers may choose to provide a probationary period in the contract of employment; the maximum term for probation is four months. It is currently not permissible for the probationary period to be extended; however, this is being reviewed in the case of employee sickness.

If the employer wishes to terminate the contract at the end of the probation period, they must provide fifteen days’ notice.

Working Hours

A regular working week consists of 8 hours per day and 40 hours per week.
Employees working more than six consecutive hours are entitled to a rest break of at least 30 minutes.

It is the responsibility of the employer to keep a record of the hours worked by its employees; this information can be requested by the Labour Inspectorate at any time.

Any work carried out exceeding the 40-hour working week is considered overtime.
Overtime work can be undertaken:

  • upon mutual agreement between the employer and employee;
  • in unforeseen circumstances at the request of the employer in the prevention of damage.
Compensation must be given for any overtime work carried out at a rate of 1.5 times the employee’s hourly rate or, alternatively, an equivalent period of time off.


The termination of a contract must be in accordance with the grounds stipulated in the Employment Contracts Act.

Termination on mutual agreement

A contract can be terminated at any time upon mutual agreement of both parties. Agreement must be signed in writing and detail the contract end date, conditions of expiration and payment of compensation, where applicable.

Termination of contract by the employee

An employee can terminate their contract in either ordinary or extraordinary terms. An employee additionally has the right to propose termination by mutual agreement at any time.

Ordinary termination can be applied to an indefinite contract at any time; the employee is not required to give reason for the termination. However, an employee on a fixed-term contract cannot initiate ordinary termination unless a replacement employee has been found to fill the position.

Extraordinary termination requires valid grounds for termination i.e.. breach of contract on the part of the employer or due to personal circumstances of the employee or a member of their family.

Termination of contract by the employer

An employer may only terminate a contract on an exceptional basis including:

  • economic grounds;
  • violation of contract on part of the employee.

The employer must provide the employee with written notice of termination and in the case of violation, the employee must be presented with a warning before the contract can be terminated.

Notice Period

An employee is required to give 30 days’ written notice upon termination of a contract. In the event of extraordinary termination, the employee may be exempt from serving their notice period if it is deemed that immediate termination is in the interest of both parties. An employer is required to comply with the below notice periods upon termination of a contract:

Years of service
Minimum notice period
Less than 1 year
15 days
1 to 5 years
30 days
5 to 10 years of service
60 calendar days
10 or more years of service
90 calendar days

Severance Pay

Upon termination of a contract, the employer must make a ‘final payment’ to the employee, including all remuneration earned and compensation for unused holiday entitlement.

In the case of dismissal by reasons of redundancy, the employer is required to make a redundancy payment equivalent to one month’s average salary.

Holiday Entitlement

Employees are entitled to 28 calendar days’ leave per calendar year. Annual leave should be agreed by 31st March of each year in a holiday schedule. The employee may split their leave entitlement, if both parties agree, provided that one period accounts for a minimum of 14 consecutive days. Employers have the right to refuse any leave requests of less than 7 days.

Holiday accrual begins from the first day of employment; however, holiday cannot be taken until the completion of six continuous months of employment. Leave is accrued at a rate of 2.33 days per working month from the first day of employment.

An employee may choose to carry forward up to 28 days’ leave by a maximum period of one calendar year.

Remuneration for annual leave should be paid no later than the penultimate working day before the leave begins, unless agreed by both parties.

Public Holidays

New Year’s Day
1st January
Independence Day – Anniversary of the Republic of Estonia
24th February
Good Friday
According to Western Calendar
Easter Sunday
According to Western Calendar
Spring Holiday
1st May
Whit Sunday
Victory Day
23rd June
Midsummer’s Day
24th June
Independence Restoration Day
20th August
Christmas Eve
24th December
Christmas Day
25th December
Second Day of Christmas
26th December

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