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Basic Economic Summary

Estonia is a developed country that is known for a high-income advanced economy. The economy also ranks very high in the Human Development Index and is also known to rank consistently high for the quality of life, digitalization of public services, education, and the prevalence of technology companies. This has therefore made the IT industry the leading contributor to the GDP of Estonia. With the key indicators of a developed economy, employees across the globe are shifting to Estonia, and a few factors leading to employers expanding their global team to Estonia. 


  • Local Languages: Estonian
  • Capital: Tallinn
  • Major Economic Hubs: Tallinn, Tartu, Narva
  • Currency: Euro
  • Population: 1.33 million
  • Time Zone: UTC+02:00 (EET), UTC+03:00 (EEST, Summer - DST)
  • Date Format: dd/mm/yyyy

Useful Information

  • GDP Per Capita (in USD): 27,101
  • Exchange Rate (EUR/USD): 1.13

Local Universities

Top Local Universities

Universities Ranking
University of Tartu / Tartu Ülikool Ranking in Estonia: 1

World Ranking: 433

Tallinn University of Technology / Tallinna Tehnikaülikool Ranking in Estonia: 2

World Ranking: 1080

Tallinn University / Tallinna Ülikool Ranking in Estonia: 3

World Ranking: 1641

Estonian University of Life Sciences / Eesti Maaülikool Ranking in Estonia: 4

World Ranking: 1805

Estonian Business School / EBS Rahvusvaheline ülikool Ranking in Estonia: 5

World Ranking: 6349

Further information on universities in Estonia can be found on Webometrics.

Salary Data

Average Salary of Jobs (Per Month)

The table below shows the average salaries of some jobs in Estonia. Please refer to SalaryExplorer for more information.

Job Title Average Salary Range (EUR) Average Salary Range (USD)
Physician/ Doctors 2,360 - 10,900 2793.63 - 12902.77
Legal 1,020 - 8,140 1207.41 - 9635.64
Bank Managers 2,560 - 7,730 3030.37 - 9150.31
Chief Executive Officer 2,830 - 9,000 3349.98 - 10653.66
Chief Financial Officer 2,640 - 8,200 3125.07 - 9706.67
College Professors 1,390 - 5290 1645.40 - 6261.98

On average, an employee in Estonia earns 2,740 EUR with the lowest average being 690 EUR and the highest average being 12,200 EUR. however, this is bound to change as per location, profession, and the industry the employee is employed in. You can read more about salaries on SalaryExplorer.

Talent Sourcing Tips


Employer Payroll Tax

The employer payroll tax is calculated as follows:

Category Rate
Pension 20.00%
Health Insurance 13.00%
Unemployment Insurance 0.80%

Employee Payroll Tax

The employee payroll tax is calculated as follows:

Category Rate
Pension 2.00%
Unemployment Insurance 1.60%

Employee Income Tax

Estonia has a proportional flat tax rate of 20%.

Minimum Wage & Payroll

Minimum Wage

The minimum wage in Estonia is €584 per month.

Payroll Cycle

The employee must be paid monthly.


13th month salary

There is no provision for the 13th month salary in Estonia.

Employee Stock Options

There is no provision for employee stock options in Estonia. Employers may provide employee stock options to the employees on mutual agreement in writing in employment contracts.

Working Hours & Statutory Leave

Working hours

The typical number of working hours in Estonia is 40 hours a week. 

Overtime pay

In terms of overtime, it cannot exceed over 8 hours within a 7 day period.

Public Holidays

Number of public holidays is 12 days. The list of holidays can be found here.


Annual Paid Leave

The number of paid leave days entitled to employees is 28 days per year.

Sick Leave

Employees are entitled to 182 days of sick leave a year, with the maximum being 250. The salary paid during this period is 70% of his or her last average salary.

Parental Leave

Female employees are entitled to 140 days of maternity leave which can commence 70 days before the birth of the child. Maternity benefits are paid by the state.

Paternity leave is given for about 10 working days within 2 months of the expected due date of the child.

In Estonia, a mother or father is able to take paid parental leave until the child is of an age up to 3 years.

Offboarding & Termination

Termination Process

Termination in Estonia can take place in three ways: 

Immediate Termination - An employer terminates the contract immediately due to misconduct

Employee Resignation - An employee can send a written resignation between 14 days to 1 month.

Termination with notice - Notice period is determined from the employee agreement.

Notice Period

Notice period depends on the duration of the employment:

  • Less .than a year - 15 days’ notice
  • 1 - 5 years of employment - 30 days’ notice
  • 5 - 10 years of employment - 60 days’ notice
  • 10+ years of employment - 9- days’ notice

Severance Pay

If the contract is terminated due to redundancy, the employer must pay compensation of one month’s average wage of the employee equivalent to the average of the previous 6 month’s salary.

Probation period

The probation labour contract should not exceed 4 months.


It is mandatory for employers to cater insurance benefits to their employees. 

Who is entitled to health insurance:

  1. Employees working under an employment contract 
  2. Under the contract of the Law of Obligations Act, recipients of employment/service fees are entitled 
  3. Members of the directing body, Sole proprietors 
  4. Employees with at least a 1-month contract

An employee becomes eligible for health insurance from the employers if they have their primary place of residence registered in Estonia keeping in mind that regular contributions to social security are mandatory to claim health insurance.

All employees in Estonia pay 1.6% of their gross earnings and employers pay 0.8% of the payroll for unemployment insurance. Unemployment insurance is withheld from the employees' salary automatically.

Read more about eligibility for health insurance here.


The standard VAT rate in Estonia is 20%

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