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Estonia boasts a highly trained workforce, with 86% of them proficient in at least one foreign language.
Estonia is recognized as one of the most technologically proficient countries globally. Hiring remote employees from Estonia provides access to a highly educated, tech-savvy, and inventive workforce.
According to the 2016 Human Capital Report, Estonia is ranked 15th globally for maximizing human capital potential, indicating a strong talent base.
The country has attracted a significant number of foreign talents in recent years, partly due to lenient visa requirements. Estonia's visa regulations are described as unbureaucratic, making it easier for international talent to work in the country.
In Estonia, employment contracts may take the form of either permanent or fixed-term arrangements, provided that the temporary nature of the work is demonstrable. Irrespective of the employment type, the Estonian Employment Contract Act stipulates that written agreements must encompass, at a minimum, the following essential details:
The probationary periods for employment in Estonia are limited to a maximum duration of four months.
The standard work week consists of 40 hours, typically distributed as 8 hours per day over a five-day work week.
Any work conducted beyond the standard 40 hours per week is considered overtime. The regulation and compensation for overtime are typically outlined and governed by the terms specified in employment contracts or collective agreements.
The national minimum wage is 725 EUR per month and 4.30 EUR per hour.
Employers aren't required to give a 13th-month salary, but it's common to receive annual bonuses.
In Estonia, there's a flat tax rate of 20%, along with a tax-free minimum of up to 654 EUR per month. However, this exemption decreases as income rises, and it reaches zero when the annual gross income exceeds 25,200 EUR or 2100 EUR per month.
Estonia's pension system consists of three pillars: the State Pension (Pillar I) based on solidarity, the Compulsory Funded Pension (Pillar II) with a 20% employer contribution, and the Supplementary Funded Pension (Pillar III) for optional pension enhancement. State pensions are available to individuals aged 63 and nine months with 15 years of service, offering various options including early-retirement and deferred pensions.
The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Estonia tailored to your needs.
In Estonia, employers have the authority to terminate a fixed-term contract for various reasons, including:
The duration of notice an employer must provide to an employee before terminating the working relationship depends on the length of the employee's service:
If an employee's contract is terminated due to redundancy, the employer must provide severance pay, equal to one month's salary based on the average earnings of the past six months. Additionally, employees with 5 to 10 years of service receive one extra month's salary from the unemployment insurance fund, and those with 10 or more years of service get an additional month's salary from the same fund.
Employees have the right to take national holidays off. These holidays include:
In Estonia, there are three types of social security that employers, including non-residents with operations in Estonia, must contribute towards:
Legal and compliance experts are readily available to provide guidance and case-by-case Q&A support.
By leveraging dedicated support from in-house legal and compliance experts for case by case questions and more.
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