Payroll and Benefits Guide Estonia

Last updated: May 03, 2023

Euro (EUR)
Employer Taxes
Payroll Frequency
Employee Costs
Date Format
Fiscal Year
1 January- 31 December



Employer Payroll Contributions




Health Insurance


Unemployment Insurance

* There is usually a minimum obligation for the social tax to be paid 215.82 EUR monthly, even if there were no salary payments to employee.


Total Employment Cost


Employee Payroll Contributions

1.60% – 3.60% Total Employee Cost
1.60% Unemployment Insurance
2.00% Compulsory Pension for those born after December 31, 1982


Employee Income Tax


* The tax-free minimum of which no deduction of income tax takes place is up to 654 EUR in a month but decreases depending on the total income amount. When the annual gross income exceeds 25,200 EUR or 2100 EUR per month, the exemption is zero.

Flat Rate

Employer taxes


Employee taxes


Minimum Wage


In Estonia, the national minimum wage is 725 EUR per month and 4.30 EUR per hour.




Payroll Cycle

The payroll cycle in Estonia is generally monthly, and payments must be made on the same day of the month and no later than the last working day of the month.

13th Salary

In Estonia, a 13th-month salary is not mandatory. However, bonuses are common and often paid annually.

Working Hours


The standard work week in Estonia consists of 40 hours a week, typically 8 hours a day for a five-day work week.


All work above the standard working hours a week is paid as overtime and regulated by employment contracts/collective agreements. When an employee is requested to work overtime or work on holidays, there are no maximums in relation to the number of hours allowed except in the case of minors.

Working Week



Paid Time Off

In Estonia, the annual leave entitlement differs depending on the job role and employment contract/collective bargaining agreement in place. According to Section 55 of the Employment Contracts Act, an employee’s annual paid leave is 28 calendar days, unless the employee and the employer have agreed on a longer annual leave or unless otherwise provided by law.

For example, government officials are entitled to 35 days of annual leave, and academic and research staff receives 56 days of paid leave.

Vacation Days
Public Holidays

Public Holidays

There are 12 public holidays.

Sick Days

Employees in Estonia are entitled to up to 182 calendar days per year. Day 1 to 3 is unpaid leave, day 4 to 8 is paid by the employer, and day 9 to 182 is paid by health insurance at 70% pay.

The current sick leave compensation scheme where employees receive payment from the second day of sickness is extended to June 30th, 2023.

Maternity Leave

Pregnant employees are entitled to 140 days of maternity leave in Estonia, which can start at the earliest 70 days before the due date and has a minimum of 30 days.
Maternity leave is compensated at one 100% of average earnings calculated based on employment in the previous calendar year with no upper limit on payments. The minimum wage of 654 EUR per month is paid to mothers who had not worked in the last calendar year but then worked before the child’s birth.

The health insurance contributions fund the payment of maternity pay at a rate of 100% of the employee’s average earnings based on the previous year’s earnings. The minimum wage is paid to mothers who had not worked during the previous calendar year but worked before the child’s birth.

Childcare allowance will no longer be granted to children born after 31, August 2019, however, the payment of child allowance and other family allowances will continue.



Paternity Leave

Fathers are entitled to 10 working days of paternity leave taken within two months of the due date. After the birth, the father is entitled to 2 months’ paternity leave. Pay is based on the average wage of the employee. The father is entitled to 100% of their regular wages, however, this is capped at three times the minimum wage.

Parental Leave

With effect from 1st April 2022, parents will be able to take up to two months of parental leave at the same time and they will both receive parental benefits at this time. Parents of premature babies and multiple births will be given an exception and the total duration of the payment of parental benefits will not be reduced by more than 30 days.

This will ensure that these families can stay at home with their children in any case until the children reach 18 months of age. A parent can also claim parental benefit until the child is three years old.

Childcare leave will be granted to both parents separately and on a per-child basis, which will solve the issue of using childcare leave in blended families.
Both parents will have their individual right for the leave and benefit and can both separately claim paid parental leave of 10 days per child until the end of the calendar year in which the child reaches 14 years of age.

In conjunction with this, the parental leave benefit will be increased to half of the average wages of the parent.

Other Leave

Depending on the collective agreement/employment contract terms, an employee may be allowed additional leave types approved between the employer and employee for the following:

  • Adopter’s leave: a person who adopts a child under the age of 10 is entitled to paid leave based on the employee’s average salary.
  • Childcare leave: a mother or father can take paid leave (pay is equal to the minimum wage) and varies based on the age of the child:
    • Up to 2 children under the age of 14 – 3 days of leave
    • 3+ children under the age of 14- 6 days of leave
  • For parents with a disabled child- the mother or father can take off an additional day of work each month until the child reaches the age of 18. This leave is also compensated based on the minimum wage.
  • Study leave: an employee has the right to 30 days of study leave as prescribed in the Adult Education Act. Twenty of the 30 days are compensated at the rate of the employee’s average salary.


Termination Process

Employers can terminate a fix term contract for the following reasons – business, personal, or workers misconduct. It requires notice and a written explanation for the termination. If the reason is misconduct, a warning needs to be given and the employee gets a chance to explain actions.

Notice Period

In Estonia, the notice period is stipulated by the service that the employee has worked at a single organization as follows:
Less than one year – 15 days’ notice
1-5 years of employment- 30 days’ notice
5-10 years- 60 days’ notice
10+ years- 90 days’ notice
It is also possible to give pay in lieu of notice.
If an employer terminates employment during the probation period, the employer must give 15 days’ written notice.

In case the employee resigns he must give 30 days’ notice.

Severance Pay

In cases of termination of the employment contract due to redundancy, the employer must pay compensation of one month’s salary payment (calculated on the employee’s average wage across the previous six months).

Employees with employment service of between 5 to 10 years are entitled to an additional one month’s salary from the unemployment insurance fund (Töötukassa); if the employees’ service is ten years or more, the employee is entitled to an additional one month’s salary from the unemployment insurance fund.

Probation Period

Probation periods cannot be more than four months.



Business visitors to Estonia typically use a Schengen C Visa unless they are visa exempt based on their nationality or a treaty. The Schengen Area limits stay to 90 days in 180 days. The visa can be obtained at their nearest Estonian consular post or a Schengen member state consular post representing Estonia.

The main work authorization category is the Residence Permit for Employment, suitable for foreign workers with skills not locally available. Estonia also offers a short-term employment program for work activities for up to 12 months and a digital nomad visa for remote work for up to 12 months.



The standard rate of VAT in Estonia is 20.00%

Stay up to date on payroll & employment law changes

Version History

April 10, 2022
The national minimum wage is now 654 EUR per month and 3.86 EUR per hour.

Questions & Answers

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1 year ago

What benefits are expected that are not part of what they receive by law? 

Emily Kuhnert
Emily Kuhnert
1 year ago
Reply to  Elor

Hi Elor, thank you for your question. In Estonia, it is not common for an Estonian company to give non-mandatory benefits, you will usually find that this is generally offered by international companies dealing in the tech or financial industries. Benefits include more paid leave, car allowance, gym memberships, and private health insurance.

Abigail Aldouri
Abigail Aldouri
1 year ago

Hi are employees permitted to carry over leave from one leave year tot he next? And are there any further rules around this?

Erez Greenberg
Erez Greenberg
1 year ago

Vacation must be taken within one calendar year (from January 1st until December 31st). There is no carryover of unused leave. However, if the employee has not taken advantage of unused holidays upon the termination of employment or service, the employer must pay the employee monetary compensation for the unemployed holidays, up to a maximum of four years.

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Payroll and Benefits Guide
in Estonia

What’s covered in this guide:

  • Employer/employee contributions
  • Minimum wage
  • Working hours
  • Visa requirements

And more...

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All questions are answered by our in-house compliance department working in conjunction with our local in-country partner for this specific country

Public Holidays Calendar

Estonia 2023
Day Date Holiday Notes
Sunday Jan-1 New Year’s Day
Friday Feb-24 Independence Day
Friday Apr-7 Good Friday
Sunday Apr-9 Easter Sunday
Monday May-1 Spring Day
Sunday May-28 1st Sunday of Pentecost
Friday Jun-23 Victory Day
Saturday Jun-24 Midsummer Day
Sunday Aug-20 Day of Restoration of Independence
Sunday Dec-24 Christmas Eve
Monday Dec-25 Christmas Day
Tuesday Dec-26 Boxing day