Estonia, a country in Northern Europe, borders the Baltic Sea and the Gulf of Finland. Including more than 1,500 islands, its diverse terrain spans rocky beaches, old-growth forests, and many lakes. It is bordered to the north by the Gulf of Finland across from Finland, to the west by the Baltic Sea across from Sweden, to the south by Latvia, and to the east by Lake Peipus and Russia. Oil shale energy, telecommunications, textiles, chemical products, banking, services, food and fishing, timber, shipbuilding, electronics, and transportation are key sectors of the economy in Estonia.
*Please note that the official currency is the currency of remuneration when employed through WorkMotion in Estonia.
Euro (EUR, € )
Languages spoken :
1.33 million (2021 est.)
Minimum wage 2023 :
Cost of Living index :
$$$ (47 of 139 countries)
Payroll Frequency :
VAT - standard rate :
GDP - real growth rate :
8.3% (2021 est.)
The approximate time for sharing the contract with an employee in Estonia is 5 business days assuming no special requests or changes to our standard employment contract. Any such requests or changes would need to undergo internal and external review, directly leading to a time delay.
NOTE: This number is subject to change and is only an estimation of the Contract Sharing Time. The estimated Contract Sharing Time begins from the moment that WorkMotion has received all required information from both the client and the employee.
The general national standard working limit in Estonia is eight hours per day or 40 hours per week. Employees are entitled to a 30 minute break after six consecutive hours of work. They are also entitled to at least 11 hours of daily rest and 48 hours of weekly rest.
Total working time including overtime must not exceed an average of 48 hours per week over a four-month recording period. Compensation for overtime work is paid at 1.5 times the employee’s wages.
A probationary period must not exceed four months. In the case of the employment contract entered into for a specified term of up to eight months, the probationary period may not be longer than half of the contract term.
Cancellation of Employment Contract during Probation Period
A 15 day notice is required from both parties.
Cancellation of Employment Contract by the Employee
|Ordinary cancellation (without reason)
|Extraordinary cancellation (for justifiable reasons)
|No notice required
Extraordinary Cancellation of Employment Contract by the Employer
An employer can only terminate an employment contract on an exceptional basis, i.e. the employer must always have a reason for terminating the employment contract. The ordinary cancellation of an employment contract by the employer (without reason) is prohibited by law.
|Years in Employment
|Less than 1 year
|No less than 15 days
|1 to 5 years
|No less than 30 days
|5 to 10 years
|No less than 60 days
|10 years and above
|No less than 90 days
Employees are entitled to 28 calendar days of annual leave. Government officials are entitled to 35 days of annual leave, and academic and research staff receive 56 days of paid leave.
Employees in Estonia are entitled to up to 182 calendar days of paid sick leave paid at 70% of the employees’ previous year’s average salary. The employer pays sick leave pay from the fourth day to the eighth day of sickness. No sickness benefit is received for the first three days. The health insurance pays sickness benefits from day nine. A certificate of incapacity for work received from the doctor should be presented to both the employer and the health insurance fund.
A mother or father has the right to child care leave until the child reaches the age of three years. Child care leave may be used by one person at a time. A parental benefit is awarded for 435 days from the date when entitlement to the benefit arose.
Parental leave can be used in several parts but 30 days of advance notice must always be given. It may also be taken in one go, or be interrupted by a return to work before being resumed before the child reaches three years of age.
Each parent is entitled to a total of 10 days of individual child leave per child until the child reaches the age of 14. If a parent has several children, the parent has the right to no more than a total of 30 calendar days of child leave in one calendar year.
A mother and father who is raising a child of up to 14 years of age or a disabled child of up to 18 years of age has the right to child leave without pay of up to 10 working days every calendar year.
A woman has the right to maternity leave of up to 100 calendar days if a certificate for maternity leave has been issued for her under the Family Benefits Act. The maternity leave becomes collectible 70 calendar days before the estimated date of birth of the child determined by a doctor or midwife.
If a woman starts using her maternity leave less than 70 calendar days before the estimated date of birth of the child determined by a doctor or midwife, the maternity leave is shortened by the respective period.
If the child is born more than 70 calendar days before the estimated date of birth of the child determined by a doctor or midwife, the woman is entitled to maternity leave for 100 consecutive calendar days as of the date of birth of the child or, where the woman was performing her duties on the day the child was born, as of the day following the date of birth of the child.
A father has the right to paternity leave to the extent of 30 calendar days in one part or in parts during the period of time from 30 days before the estimated date of birth of the child determined by a doctor or midwife until the child attains three years of age. The employer has the right to refuse to grant paternity leave in a part shorter than seven calendar days.
An adoptive parent has the right to adoptive parent leave of a total of up to 70 calendar days in one part or in parts within six months as of the date of entry into force of the court judgment approving the adoption. The employer has the right to refuse to grant adoptive parent leave in a part shorter than seven calendar days.
The adoption benefit is paid by the Health Insurance Fund in the amount of 100% from the first day of exemption from work.
The employee is entitled to up to 30 calendar days of academic leave per year to attend training. For degree and job-related training, the employer must pay the average daily remuneration to the employee for 20 calendar days. The employee is free to use unpaid leave to cover the remaining 10 calendar days.
To complete degree studies, the employee is given an additional 15 calendar days of academic leave, compensated by the employer on the basis of minimum wage.
Estonia has a solidarity health insurance system. Solidarity in health insurance means that someone’s health insurance payments, contribution to the system, or access to the necessary assistance do not depend on age, income, or health risks. All medically insured people in Estonia are entitled to the same quality of healthcare, regardless of whether or not they pay the health insurance tax. The right to health insurance (ravikindlustus) is created through employment.
The employer contributes 13% towards healthcare insurance.
The main costs of work accidents are covered by the Health Insurance Fund (for sickness benefit and medical expenses) and the Unemployment Insurance Fund (for workability allowances and work rehabilitation).
In case of a work accident, the employee’s waiting period is one working day, and from the second day, the expenses are covered by the Health Insurance. For general accidents, the waiting period is three working days. The employer covers the next five days, and from the ninth-day expenses are covered by Health Insurance.
Unemployment insurance is compulsory when working in Estonia. It serves to ensure employees are against unemployment, the collective termination of employment contracts, or employer insolvency. Benefits are funded from unemployment insurance contributions.
The employee’s unemployment insurance contribution is 1.6% of salary and other remuneration. The employer’s contribution is 0.8% of the salary fund. Rates for unemployment insurance contributions are established by the Supervisory Board of the Unemployment Insurance Fund. The unemployment insurance premium is not compulsory for workers who have reached pensionable age and workers who are receiving an early retirement pension.
The Estonian pension system is divided into three pillars:
The state pension is national pension insurance based on the principle of solidarity. There are two types of state pension: pensions based on work contributions (old-age pension, incapacity benefit, and survivor’s pension) and the minimum or national pension.
People who have reached 63 years and nine months of age and who have accumulated 15 years of pensionable service in Estonia have the right to receive an old-age pension. The types of old-age pensions available are early-retirement, deferred, and old-age pensions on favorable terms.
The contribution rate for the compulsory funded pension is 20% of the taxable income for the employer.
Upon the death of a provider, family members who were dependent on them have the right to receive a survivor’s pension. Survivor’s pension is granted to children, parents, widows, or widowers irrespective of whether they were dependent on the provider or not.
The survivor’s pension is funded by the public pension. Employers contribute 20% towards the public pension.
The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. WorkMotion Software GmbH disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.
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