Global Hirings

October 23, 2023

3 mins

Essential Factors for Successful Hiring in Estonia

With a notable freedom score of 80.0, Estonia proudly holds the 7th position in the global ranking of freest economies. Benefiting from its membership in the European Union, Estonia's economy thrives on trade. This strategic advantage has fostered robust economic connections with key partners like Finland, Sweden, and Germany. Additionally, Estonia's growth story is enriched by its flourishing telecommunications and electronics sectors, further propelling its ongoing progress and prosperity.

Employing in Estonia

Employees in Estonia are characterized as highly skilled, making the country’s labor market a promising opportunity for global businesses. Additionally, labor laws and rules are easy and straightforward.


Employee Contract

While the primary language employed in employment contracts is Estonian, it's possible for the contract to be drafted in a foreign language if mutually agreed upon by both parties.

Probation Period

In Estonia, employees undergo a probationary period lasting between 1 to 4 months.

Employee Leaves

Annual Leave 28 days

Sick Leave 30 days

Maternity Leave 140 days


Payroll Cycle

In Estonia, employees receive their payment on a monthly basis.

Minimum Wage

As of 2023, the minimum gross hourly wage is 4.30 EUR, while the minimum monthly wage is set at 725 EUR.

Overtime Pay

In Estonia, the standard weekly working hours total 48 hours. Overtime should not surpass 8 hours within a 7-day timeframe. The accumulation of overtime can be offset by work on other days, unless employers opt to provide monetary compensation for the extra hours. In such cases, overtime is remunerated at a rate of 1.5 times the regular wages.

Bonus — 13th Month Pay

In Estonia, providing a 13th-month pay is not obligatory.

Employee Benefits

Estonia provides an array of advantages to its employees. Here are some of them:

  • Maternity leave
  • Paternity leave
  • Pension system
  • Employment Insurance
  • Health Insurance
  • Dental Care

Employee Income Tax

Estonia applies a uniform 20% tax rate to all income-related acquisitions.


The established value-added tax (VAT) rate in the country is 20%. Nonetheless, specific items like books, periodicals, medicines, medical equipment, accommodations, sanitary products, and toiletries can qualify for a reduced rate of 9%.

Offboarding & Termination

Termination Process

Termination procedures in Estonia encompass three approaches:

  • Immediate Termination: An employer can promptly end the contract due to misconduct.
  • Employee Resignation: Employees have the option to submit a written resignation within a timeframe ranging from 14 days to 1 month.
  • Termination with Notice: The terms of the employee agreement dictate the notice period required.

Notice Period

The notice period for probationary employees is determined by the agreement between the employee and employer, while non-probationary employees are typically subjected to notice periods ranging from 15 to 90 days.

Severance Pay

In cases of contract termination due to redundancy, the employer is required to provide compensation equivalent to one month's average wage based on the employee's last six months' salary. Furthermore, for employment terms spanning between 5 and 10 years, an extra one month's pay is mandated.

Visa and Immigration

As an EU member, Estonia falls within the European Union (EU). Foreign workers from EU countries are not required to obtain a visa for entry. However, if they plan to work and reside in Estonia for over three months, they are required to apply for a residence permit at the Population Register of Estonia and obtain an Estonian ID card.

For non-EU citizens aiming to work and reside in the country for more than three months, they must undergo the process of obtaining a Schengen D-visa along with a residence permit.

Furthermore, Estonia introduced a Digital Nomad visa on August 1, 2020, to incentivize remote workers to visit and work within the nation. This visa facilitates legal employment in Estonia for foreigners, even when their employers or businesses are registered abroad.


📬 Receive our amazing posts straight to your inbox. Get the latest news, company insights, and Niural updates.

Thank you! Your message has been received!
Oops! Something went wrong. Please fill in the required fields and try again.

‍If you're considering hiring employees or contractors in Estonia or seeking compliant payroll solutions, reach out to us or book a demo at For further insights, follow us on Twitter @niuralhq. Make informed decisions and ensure a successful hiring process in Estonia! 

Request a demo