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Estonia PEO & Employer of Record

Streamline your expansion into Estonia, with New Horizons

Expand your business into Estonia, with or without having an Estonian entity

Estonia’s economy was among the fastest-growing in Europe during the early 21st Century, and it has rapidly become a popular site for foreign investment. However, If you are planning an expansion into Estonia, you may encounter unexpected delays. With the country’s complicated nationwide and EU-level law, unique language, and more potentially leading to a long expansion process that can take weeks or even months.

At New Horizons, our experienced expansion team helps businesses expand into Estonia. Our tailored professional employer organization (PEO), employer of record, and payroll services can provide you with all the support you need to efficiently expand your business into Estonia, whether or not you have already established an Estonian entity.

Additionally, our dedicated in-house recruitment team can find, hire, and onboard your new employees in Estonia, as well as manage any ongoing HR and compliance administration. Our dedicated team will provide everything you need to expand into Estonia as efficiently as possible and could drastically cut your expansion costs.

How New Horizons outsourcing can help you expand into Estonia

New Horizons enables your business to expand its operations into Estonia, without needing to establish up an Estonian subsidiary.

Rapid Market Entry

New Horizons will enable you to source, hire, and onboard professionals across Estonia in as little as 48 hours.

Cost-Effective Expansion

Our PEO solution can help you benefit from cost savings of up to 85%, without the need to establish an Estonian entity.

Payroll Outsourcing

Simplified Estonia salary & payroll processing, including social security payments, tax, and any other required contributions.

Employee Onboarding

Utilize the relevant provision for all types of Estonian labor contracts, whether a fixed-term or open-ended contract.

Onsite Legal & HR Team

Full support for Estonia-specific contract renewals, terminations, annual leave management, HR, and strategic guidance.

Ensure Full Compliance

We ensure that employment contracts are fully compliant and adhere to Estonian labor laws and best practices.

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Employment & Labour Laws in Canada

Estonia employment contracts

Formal employment contracts are a legal requirement in Estonia. These contracts should be provided for every employee and include all relevant details of the employment agreement, such as working hours, description of duties, salary/wage, and so on. The contracts should always be written in Estonian and use the local currency of the Euro.

Working hours in Estonia

The normal working week for employees in Estonia is made up of five eight-hour days, totaling 40 hours per week.

National holidays in Estonia

Date
Description
1 Jan
New Year’s Day
24 Feb
Independence Day
10 Apr
Good Friday
12 Apr
Easter Sunday
1 May
Spring Day
10 May
Mother’s Day
31 May
Pentecost Sunday
23 Jun
Victory Day
24 Jun
St. John’s Day
20 Aug
Independence Restoration Day
18 Oct
Ethnicity day
8 Nov
Father’s Day
24 Dec
Christmas Eve
25 Dec
Christmas Day
26 Dec
Boxing Day

Vacation in Estonia

Generally, employees in Estonia are entitled to 28 days of paid vacation leave per year.

Sick leave in Estonia

Workers in Estonia are entitled to up to 182 days of sick leave per year, which is covered at 70% of normal pay by both the employer and the state. From the fourth to the eighth days of absence, employers pay the compensation, and the state takes over payments for any following absence.

Maternity and paternity leave in Estonia

Female employees in Estonia can take up to 140 days of paid maternity leave, with the government paying the benefit during this time.

Fathers can take up to ten days of paid paternal leave, which is also covered by the government.

There is also a possibility to take parental leave up until the child turns three. This leave (in combination with maternal leave) has a limit of 575 days and is also covered by the state.

Employee severance and terminations in Estonia

The standard notice period prior to termination for employees in Estonia is between 15 and 90 days, depending on how long they have been with their employer. 

Upon redundancy, employees are entitled to a severance payment of one month of salary. For employees who have worked for between five and ten years, this payment is increased by one month of salary (covered by unemployment insurance), and if they have more than ten years of service then they receive two extra months.

Probation periods in Estonia have a limit of four months.

Tax laws in Estonia

Employers in Estonia must contribute a percentage of salary toward employee benefit schemes. 20% must be contributed to pensions, and 13% to health insurance, totaling 33% on top of salary.

There is also an unemployment insurance scheme, to which employers must contribute 0.8% of salary, and employees must contribute 1.6%.

The income tax rate in Estonia is 20%. The corporate tax rate in Estonia is generally 20%, but this rate can vary in some circumstances.

Health coverage in Estonia

Estonia has state-funded healthcare, so employers are not required or expected to offer private health insurance.

Estonia compensations & benefits

Compensation laws in Estonia

As of January 2020, the minimum wage in Estonia is €3.48 per hour.

Benefit management in Estonia

Building a benefits system for your Estonian workforce can be difficult and complicated to navigate if you are not familiar with the country, its customs, and its employment laws. To set it up independently, it can take several weeks and potentially lead to unexpected delays.

New Horizons can help to significantly simplify this step of your Estonia expansion by providing benefit management outsourcing. Our team can advise you and handle the setup of your benefits scheme, enabling you to focus on expanding your organization in Estonia.

Request a proposal

Let us know your Estonia expansion goals