HR Software for Estonia
Leave Policy
Maternity Leave
Pregnant employees are entitled to up to 100 consecutive calendar days of maternity leave, including the expected date of birth of the child.
Employees can claim maternity allowance up to 70 calendar days before the expected date of birth of the child and 30 calendar days after the expected date of birth of the child. The social security institution is responsible for the payment.
Paternity Leave
Employees are entitled to 30 calendar days of paid paternity leave.
The employee receives 100% of his average salary during this period (a maximum of three times the average Estonian gross salary), and the Social Security Institute is responsible for this salary.
The benefit can be claimed until the child is 3 years old.
The employee can extend the leave as part of parental leave.
Parental Leave
Employees are entitled to 60 days of parental leave. Both parents can decide how to divide the time and they can take the vacation at the same time. The social security institution pays the salary during this period.
The amount of parental allowance is calculated separately for each recipient and depends on their previous income.
The amount depends on the amount of social tax paid, declared for employment income (in 2023, the maximum amount of parental allowance is EUR 4,231.29 gross per month).
Parental leave cannot be extended.
Sick Leave
Employees are entitled to 182 days of sick leave in the event of illness (other than tuberculosis).
The first day is unpaid and is considered a waiting period. In the event of illness or injury, an insured person is entitled to sick pay until his or her ability to work is restored (as indicated in the sick leave certificate).
In the event of tuberculosis, employees are entitled to 240 consecutive calendar days of sick leave.
| Period | Pay | Payer |
|---|---|---|
| Day 1 | 0% | Qualifying period |
| Day 2 – 5 | Based on employee’s average salary for the last 6 months (Average 70%) | Employer |
| Day 6 onwards | Based on the amount of social tax calculated or paid for the employee for the previous calendar year | Estonian Health Insurance Fund (EHIF) |
Pay & Tax
Minimum Wage Requirements
The minimum wage is EUR 820 per month.
Individual Income Tax
The individual income tax rate in Estonia is 20%. Income tax is calculated at a flat rate. The rate may vary depending on when deductions are made for an employee’s retirement and unemployment insurance.
Payroll Cost
The cost to the employer is generally estimated at 33.8% of the employee’s wages.
- Social Security Tax – 33.0%
- Unemployment insurance tax – 0.8
Other costs:
- Medical examination (upon recruitment and to be repeated every three years) – 160 EUR
Overtime Pay & Maximum Hours
The standard working hours are 8 hours per day and 40 hours per week. The normal working week lasts from Monday to Friday.
Pay for overtime is mandatory. Hours worked outside of normal working hours are considered overtime. As a rule, full-time employees can work a maximum of 8 hours of overtime per week, which corresponds to an average of 48 hours of work per week. By agreement with the employee, he can work 12 hours of overtime per week, i.e. H. an average of 52 working hours per week as a full-time employee.
Termination
Termination Requirements
Dismissals must take into account complex rules and the regulations of the country in which an employee is employed. Off-boarding is always carried out by the employer with the main participants. It may include ad hoc fees as well as required or recommended steps for specific termination cases.
Terminations in Estonia can be complex. In Estonia, employers cannot terminate at their own discretion outside of the probationary period and the termination must be for a valid reason.
Compliant terminations are:
- Voluntary by the employee
- By mutual agreement
- Unilaterally by the employer if the employee:
1. Misconduct and breach of contract
2. Goes bankrupt
3. Becomes incompetent
4. Was convicted of a criminal offense before or during the employment relationship
5. No previous disciplinary or legal action against the employee is indicated in the employee’s CV
6. He is permanently unable to work due to an accident or illness and can no longer fulfill his duties. - When the contract expires
Notice Period
In Estonia, the notice period depends on the length of the employment relationship.
- Up to 1 year of employment – at least 15 calendar days
- Between 1 and 5 years of employment – at least 30 calendar days
- Between 5 and 10 years of employment – at least 60 calendar days
- 10 or more years of employment – at least 90 calendar days
Severance for Employees
In Estonia, severance pay is paid based on the reason for termination.
| Reason for termination | Severance Pay |
|---|---|
| Lay-off | 1 average monthly salary |
| Breach of contract by the employer | 3 average monthly salaries |
| Termination of a fixed-term contract by the employer for economic reasons | Compensation to which the employee would be entitled until the end of the contract term |
To protect you from unforeseen financial risks arising from the termination of an employment relationship, IceHrm applies a severance pay provision to all employment contracts in this country. IceHrm has extensive expertise in managing litigation around the world and our settlement reserve calculation is based on prevailing common law or statutory claims and best local practices. If your employee resigns or is not entitled to severance pay, you will receive a refund of any unused amounts.
Statutory Time Off
Paid Time Off
Both full-time and part-time employees are entitled to 28 calendar days of paid time off (PTO) per year. PTO is credited monthly at 2.33 days per month. Employees are entitled to annual leave for the time they have worked so far.
Public Holidays
Estonia celebrates 12 national holidays. National holidays are:
- New Year’s Day
- Independence Day, anniversary of the Republic of Estonia
- Good Friday
- Easter Sunday
- Spring Day
- Pentecost
- Victory Day
- Midsummer Day
- Day of Restoration of Independence
- Christmas Eve
- Christmas Day
- Boxing Day
Onboarding
Onboarding
3 working days after signing the MSA and paying the deposit.
Additional Info
Employment Contract Details
The contracts must be written in Estonian or English and can be bilingual. They must be in writing and signed by both parties.
A contract must contain:
- Name
- Personal identification or registry code
- Residence or seat of the employer and the employee
- Validity of contract
- Probation period
- Job description and job title
- Working hours
- Place of work
- Remuneration
- Obligations of the parties
- Vacation
- Termination conditions
Probation Period
The probationary period is not mandatory. There is no minimum probation period. The maximum duration of the probationary period is 4 months.