Estonia at a glance
Taxes in Estonia
Employer Contributions
| Contribution | Rate |
|---|---|
| Total employer tax | 33.8% |
| Pension | 20% |
| Health insurance | 13% |
| Unemployment insurance | 0.8% |
| Contribution | Rate |
|---|---|
| Total employer tax | 33.8% |
| Pension | 20% |
| Health insurance | 13% |
| Unemployment insurance | 0.8% |
| Contribution | Rate |
|---|---|
| Total employee tax | ~23.6% |
| Pension | 2% |
| Unemployment insurance | 1.6% |
| Income tax (flat rate) | 22% |
Estonia applies a flat 22% income tax rate.
Employer of Record in Estonia
How Remote& EOR Works
Remote& acts as the legal employer of your Estonian workers, managing payroll, tax registrations, statutory benefits, and employment contracts while you direct the day-to-day work.
| Party | Role |
|---|---|
| Your Company | Manages work tasks, performance, and team direction |
| Remote& | Runs payroll, files taxes, administers benefits, ensures legal compliance |
| Employee | Works for your company under a locally compliant Estonian contract |
Ask Remi:
"Hire a DevOps engineer in Estonia — €3,500/month, starting this month" Remi handles everything: contract, tax board registration, payroll setup, and pension enrollment.
Benefits in Estonia
- Government healthcare coverage
- Business travel allowance
- Unemployment insurance
- Supplementary pension
- Paid sick leave enhancements
- Private healthcare
- Wellness programs
- Cash bonuses
- Flexible working arrangements
- Phone and internet allowance
- Gym membership
- Stock options
Leave entitlements
| Leave type | Entitlement |
|---|---|
| Paid Annual Leave | 28 days + public holidays |
| Sick Leave | 182 consecutive calendar days per illness (240 days for tuberculosis) |
| Maternity Leave | 100 calendar days |
| Paternity Leave | 30 calendar days |
| Parental Leave | 475 days (shared between parents) |
Employment conditions
Probation
Maximum probationary period: 4 months.
Non-Compete
Non-compete agreements must be in writing and specify the restricted activities, territory, and duration.
Employee Rights & Protections
Estonian workers are entitled to: written employment contract, payslip, equal opportunity, health and safety standards, unemployment benefits, anti-discrimination and anti-harassment protection, dismissal protection, pregnancy rights, union membership, and pay transparency.
Payments
End of employment in Estonia
Employers must provide a written termination declaration (email and PDF accepted) citing specific grounds for dismissal. Notice periods are determined by employment duration. Gross misconduct permits immediate termination.
All employer-owned equipment in the employee's possession must be returned on the last day of employment. The employer must de-register the worker within 10 days of termination.
Termination for economic reasons or redundancy is permitted. For performance-based dismissal, employers must warn the employee before proceeding.
Frequently asked questions
Four paths: run payroll from HQ for short-term cases; engage contractors for project-based work; set up a local entity; or use Remote& as Employer of Record. Remote& enables compliant hiring in Estonia without establishing a local company.