Estonia
Trust Lerio to provide the clarity you need in navigating employment laws of Estonia.
Hiring in Estonia at a glance
€ / EUR
40 hours / week
12 holidays / year
The most common payment frequency is monthly.
By law, an employee must be paid at least once a month and on the same day each cycle
Estonian
1M
€5.86 / hour
1st Jan – 31st Dec
Employment Tax
- Social security tax: 3.6%
- Unemployment insurance: 1.6%
- Pension (mandatory if born after 1982): 2%
- Income tax: 20% (salaries under €25 500 receive an exemption of €500 per month/ €6 000 annually)
- Social security tax: 33% (minimum of €193)
- Pension: 20%
- Health insurance: 13%
- Unemployment insurance: 0.8%
NA
Employer of Record
in Estonia
Operating as the designated employer, an Employer of Record assumes responsibility for upholding compliance with Australian employment regulations. This encompasses obligations such as payroll administration, tax filing, and the implementation of employment agreements in accordance with labor laws.
Employer of
Record Process
- Company
- Full legal name of prospective employee
- Employee contact details
- Employee nationality and residency status
- Proposed start date
- Right to work status
- Job title
- Working hours
- Job description and deliverables
- Salary information
- Benefit information
- Intellectual property and confidentiality agreement
- Terms of termination (e.g. notice period)
- Probation period
- EMployee bank details
- All other company-specific requirements (e.g. non-compete, intellectual property clauses, etc.)
Finds their perfect hire and provides Lerio with all the information required to prepare an employment agreement. For Australia, that includes:
- Lerio
Prepares the employment agreement and shares with the prospective employee for signing. Requests all additional documents such as identity documents, proof of right to work in Australia, tax information, etc.
- Employee
Signs employment agreement and submits required documents.
Umbrella Process
- Employee
Now no longer a prospective employee but simply an official employee, who ensures to keep Lerio updated on any personal information changes.
- Lerio
Onboards employee to payroll and benefit programs to get started ensuring that salaries are paid every month and benefits are administered. Tax contributions and benefit fees are paid and payslips are provided to the employee.
Lerio provides an invoice and statement to the company for each month.
- Company
Receives monthly invoice, reviews and processes. Provides information on whether anything has changed in their relationship with the employee, the employee’s role or the company that will have an effect on the upcoming payroll run.
Employee Benefits
- Health insurance
- Business travel allowance
- Unemployment insurance
- Pension
- Minimum per day per diem is €22.37 if food is not provided and can be lowered if it is
- Maximum tax-free per diem is €50 for the first 15 days and €32 for every day after that
Non-mandatory
Employee Benefits
- Extended pension
- Extended healthcare
- Additional time off
- Wellness
Employee Rights
- A safe and healthy work environment free from risk
- Protection from discrimination, harassment and bullying
- Fair and just dismissal
- Protection of personal information
- Equal and equitable access to opportunity and treatment
Leave
28 calendar days off with one break needing to be 14 continuous days.
182 days per year paid at 70% of the previous year’s income.
- 1 – 3 days unpaid
- 4 – 9 days paid by employer
- 9 – 182 paid by health insurance
20 weeks paid time off through the health fund. Paid at the rate earned the previous year and at minimum wage if they didn’t work the previous year.
Leave has to start 30 or more days before the expected delivery date.
1 month of paid leave (capped at three times the average monthly salary in Estonia) through social insurance. Can be used as one period of leave or multiple in the first three years of the child’s life.
70 calendar days, if the child is under 10 years old. Paid through health insurance at the employee’s standard rate.
435 combined days for parents through social insurance.
Parents have a combined 435 days of parental leave which is paid by the Social Security Board based on the parent’s average income. Fathers can only use this after the child turns 70 days old. The leave is shared between the parents and can be used until the child is 3 however both parents can’t take leave at the same time.
Parents are entitled to paid leave, depending on the household:
- 1 child under 6: 6 days annually
- Up to 2 children under 14: 3 days annually
- 3 or more children under 14: 6 days annually
- Child with a disability: 2 days monthly
Additional unpaid leave up to 10 days if children are under 14 or if a child has a disability and is under 18.
30 paid calendar days per year through the Adult Education Act at their standard rate.
- Less than 1 year: 15 days
- 1 – 5 years: 30 calendar days
- 5 – 10 years: 60 calendar days
- 10 or more years: 90 calendar days
Probation
Maximum of four months. If it is a contract position, the probation can’t be more than half the length of the contract period
What is a work permit in Estonia?
Work permits are official documents from a country’s government that qualifies an individual to legally work and live in the country. However, this is a broad term and many countries require more than one official document and may use different terms to refer to these documents – and Estonia is one of them. Essentially all terms are referencing documents that prove someone has been given the legal right to work and live in the country.
In Estonia, the “work permit” required to legally live and work there is referred to as a Residence Permit.
Who needs a work permit in Estonia?
Estonia requires everyone who is not a citizen or a permanent resident to go through a process of obtaining legal right to work, with certain exceptions:
EU member state citizens: All EU citizens have the right to work in another EU member state. They may however need to register their presence in the country (if staying for three months or less) or register your residence (staying for longer than three months). Estonia is an EU member state and therefore EU member state citizens don’t need to obtain any documents to prove their right to work and live in Estonia. They are required to register their residence in Estonia to receive a certificate of residence when staying for longer than three months.
Iceland, Liechtenstein and Norway: As members of the EEA (European Economic Area), Iceland, Liechtenstein and Norway citizens have the same rights as any EU member state citizen to work and live in Estonia. They are required to follow the same process as EU citizens as described above.
Switzerland: Though not a part of the EU or the EEA, the EU has an agreement with the Swiss government that allows a mutual freedom of movement. This affords Swiss nationals the same rights as any EU citizen to work and live in Estonia. They are required to follow the same process as EU citizens as described above.
Therefore, anybody who is not a citizen of an EU member state, Iceland, Liechtenstein, Norway or Switzerland needs to go through the process to obtain a legal right to work.
*UK citizens: Please see here to understand the rights of UK citizens who settled in Estonia prior to Brexit.
How long does it take to get a work permit in Estonia?
Current processing times are estimated to be:
Unemployment fund permit: 7 days
Registration of employment: 15 days
Visa: 15 days
Residence permit: 30 days
Please note that the unemployment fund permit is only valid to be used for the resident permit for 60 days. If it’s possible to apply for this at a local embassy, it’s better to do it there to ensure the unemployment fund permit is still valid.
Types of work visas in Estonia
Temporary residence permit
The temporary residence permit is a short-stay visa that allows entry into Estonia for work.
Eligibility
This is applied for at the same time as your residence permit, which is under one of the following categories and would therefore be approved if you meet their requirements:
Temporary long-term visa
There are two options for this visa, either those who are applying within the quota restrictions and those who are exempt.
Eligibility (all)
- An offer of employment from a Estonian company
- Minimum salary requirements are met
- Salary is market-related
- Employer couldn’t find a hire locally for the role
Additional requirements for those exempt from the quota
- Top ICT experience
- Employment offer from a relevant start-up
- A specialist in their field earning
- If you’re employed at a startup
- If you’re an ICT specialist earning at least €2528 gross monthly salary
EU Blue Card
The EU blue card is a combined work and residency permit available to highly skilled individuals. It allows holders access to live and work in 25 out of the 27 EU member states (Denmark and Ireland not included).
Eligibility
- Bachelors or higher degree, some states accept 5 years of relevant experience without a degree
- Must be a salaried employee, not self-employed
- Annual salary must be at least 1.5 times the average national income of the state applying for
- Offer of employment
- Health insurance
Country-specific requirements and application processes can be seen here.
Other visas:
In addition you can apply for a short-stay Schengen visa and register employment upon arrival.
Application process in Estonia
Permit from Unemployment Fund
Employers need to obtain a permit from the Estonian Unemployment Fund. This can be done by submitting the application form in person, via post, via email and by sending it to a regional department.
This is only valid for six months and is needed for the next steps.
*Exemptions from this step can be seen here and are for specialised skills, working for start ups who meet the criteria and professionals in specific fields.
Registration of Employment
Employers need to register the proposed employment at the Police and Border Guard Control. This can be done at a Service Office, electronically through a self-service system (in Estonian) or by post. Police and Border Guard Patrol. The requirements for a foreign national to be granted a registration must be shown in the documents submitted. These requirements are:
- The employee has the qualifications, work experience and skills for the role
- The employee is healthy enough to perform the role
- The company is registered in Estonia
- The salary will be at least the average salary in Estonia at the time.
Visa Application
The person looking to work in Estonia must apply for the work visa at their local Estonian embassy or consulate.
- Complete the application form (can be done online from most countries) and make an appointment with the consulate/embassy
- Collect all the required documents to prepare for the appointment
- Attend the visa appointment where:
- Required documents will be submitted
- Biometric data will be recorded
- A brief interview will be conducted (sometimes this doesn’t happen)
- Collect visa or have it delivered
Residence permit
Residence permits are applied for at a Service Office of Police and Border Guard Board in person. An appointment is required. Alternatively, local Estonian embassies or consulates may be able to facilitate this before arrival in Estonia.
Exemptions from needing a residence permit do exist but they are few. See here.
Enter into the Population Register
Within the first month in Estonia, individuals have to register on the Population Register.
What documents are required to apply for a work permit in Estonia?
Permit from Unemployment Fund
- Confirmation of employment or employment agreement
- Details of the proposed employee (Basic personal information such as name, nationality, etc.)
- Copy of an ID document of the proposed employee
- Proof that salary is at least equal to the recent average annual income in Estonia published by the Statistical Office of Estonia.
- Company information such as registration and tax details
*Exemptions from this step can be seen here and are for specialised skills, working for start ups who meet the criteria and professionals in specific fields.
Registration of Employment
- Additional proof required for certain situations can be seen here.
- Unemployment fund permit*
- Proof of required qualifications, work experience and skills for the role
- Proof that employee is healthy enough to perform the role
- Registration of the company
- Employment agreement (or other document to prove the salary amount)
- The company is registered in Estonia
*If exempt from this permit, proof that the exemption requirements are met will be required
Visa
- Confirmation of employment (ideally proof of the employment registration)
- Completed Estonia Long-Stay Visa Application form
- Passport with at least two blank pages, valid for minimum one year
- Two passport pictures
- Proof of accommodation
- Proof of health insurance
- Proof of sufficient financial means
- Proof of paid visa fee
- Proof of education and qualifications
Residence Permit
- Identity document (passport)
- 1 colour photo
- Proof that the application fee is paid
- Proof of payment for the permit fee
- Proof of health insurance
- Proof of funds
- Unemployment permit *
- Proof of registration of employment
- Completed application form
- Visa
*If exempt from this permit, proof that the exemption requirements are met will be required.
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