Country Payroll Guide Estonia

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Key Facts

Capital
Tallinn
Date format
dd/mm/yyyy
Currency
Euro (EUR)
VAT
the standard rate is 20%

Contributions

Employers

Pension
Pension - 20%
Health Insurance
Health Insurance - 13%
Unemployment Insurance
Unemployment Insurance - 0.8%
Total Employment Cost
Total Employment Cost - 33.80%

Employees

Unemployment Insurance
Unemployment Insurance - 1.6%
Pension
Pension - 2% (Employees born after December 31, 1982)
Total Employee Cost
Total Employee Cost - 3.60%

Minimum Wage

Minimum Wage
The minimum wage in Estonia is 3.83 EUR per hour and 584 EUR per month.

Payroll

Payroll Cycle
Monthly
13th Salary

Not required by law.

Income Tax

Employee Income Tax (1)
Flat Rate - 20%

Working Hours

General Working Hours

40 hours per week.

Overtime

Overtime cannot exceed 8 hours within 7 consecutive days. However, an agreement can be made to allow for an overtime allowance of 12 hours over 7 consecutive days over a 4 month period.

Leave

Paid Time Off

28 days per year.

Public Holidays

12 days.

Sick Days

Up to 182 days (paid at 75% of the employee’s salary from the previous year). In case of a temporary incapacity for work a financial compensation paid by the Health Insurance Fund or the employer on the basis of incapacity for work certificate to an insured person (i.e. an employee) who is not receiving income due to a temporary release from their work duties. Benefit for temporary Benefit incapacity for work is paid to persons for whom social security tax has been paid.

Maternity Leave

Mothers are entitled to 140 days (20 weeks) of maternity leave, which is paid at the normal salary rate. Child allowance (€320) is granted when a child is born. In the event of triplets, €1,000 per child will be given.

Paternity Leave

Fathers are entitled to 10 days (fully paid) prior to the birth. After the child has been born, the father will be entitled to a further 2 months of leave.

Parental Leave

Between the mother and father, 435 days are allocated for parental leave before the child turns 3 years old, the mother and father cannot take this at the same time.

Other Leave

Adoption Leave: This can be taken when a child under the age of 10 is adopted, the employee’s average salary will be paid.

Child care leave: Parents can take this paid leave (minimum wage) and it the amount of days allocated will be given as follows: Up to 2 children under the age of 14 will entitled the parents to 3 days of leave 3 or more children under the age of 14 will entitle the parents to 6 days of leave.

Termination

Termination Process

There are different types of termination processes: Immediate Termination, employee resignation and termination with notice.

Notice Period
  • The required notice period will depend on the length of time the employee has been in that employment:
  • Less than 1 year – 15 days’ notice
  • 1-5 years of employment- 30 days’ notice
  • 5-10 years- 60 days’ notice
  • 10+ years- 90 days’ notice
Severance Pay

When termination occurs due to redundancy, the employee will obtain the average amount of their previous 6 month’s salary. In the event of a fixed term contract being terminated, the employee will receive the amount they would have received from the date of termination to the expiry date of the original contract. Employees who have between 5 and 10 years of service will be entitled to an additional months’ salary, and over 10 years of service will warrant the employee to an additional 2 months’ salary.

Probation Period

This cannot be longer than four months.

Visa

Employment Visa

N/A