Employer of record in Estonia: costs and rules

Estonian employment rules that set the cost

• No ceiling on social tax. The 33% social tax (pension and health) and 0.8% employer unemployment insurance apply to every euro of salary, so a senior engineer costs the same 33.8% as a junior one.
• A minimum social tax base. In 2026 the minimum monthly base is EUR 886, which makes the minimum social tax EUR 292.38 a month (up from EUR 820 and EUR 270.60). On a part-time or low salary that floor can push the cost above 33%; ask the EOR whether it applies to your hire.
• The minimum wage changed in April, not January. It was EUR 886 a month until March 31, 2026 and is EUR 946 (EUR 5.67 an hour) from April 1. Pages that give EUR 886 as current are out of date.
• Probation is up to 4 months from the actual start of work; on a fixed-term contract of up to 8 months it can be no more than half the term.
• Leave is 28 calendar days (35 for minors and people with partial or no work ability), and public holidays do not count against it.

Pay is monthly, the standard week is 40 hours, and no bonus is required by law. Employees pay 1.6% unemployment insurance, 2% to the funded pension by default (they may choose 4% or 6%, or none if they left the second pillar) and 22% income tax after a flat EUR 700 monthly exemption.

Employment costs and rules in Estonia

What an EOR charges to employ someone in Estonia

A EUR 35,700 hire in Estonia, costed

Try a different salary in the calculator for employees abroad. Estonia's 33.8% compares with 23.59% in Latvia on our data; see Latvia and Lithuania, or the whole EOR cost index.

Redundancy and notice in Estonia

On a fixed-term contract, redundancy means paying wages to the end of the term. On a steady EUR 35,700 salary, one month of average wages is EUR 2,975 (35,700 / 12), so a redundancy after two years costs that plus 30 days of notice. Multiplier says it sizes its deposit partly on notice periods, so ask any provider how much of this it holds back.

Which EOR fits an Estonian hire

Multiplier ranks first on our scoring system with 79 and Oyster second with 64; Remote scores 62 and Deel 54. Yearly, one Tallinn hire costs $5,508 on Multiplier's annual plan, $8,388 with Oyster and $7,188 with Remote or Deel. Multiplier's terms set a 30-day lead time to process any termination on top of the employee's notice, and charge 15% of the final invoice if you contact the employee about termination directly. Oyster credits its deposit about 60 days after the end date. Our best employer of record comparison and the Oyster, Remote and Deel reviews have the detail.

Own Estonian company or an EOR

Converted at the October 15, 2026 rate, a $599 plan comes to EUR 6,413.28 per employee each year. An Estonian company removes that fee but needs registration, local accounting and its own EMTA filings. The EOR versus entity break-even covers the trade-off.

Contractor or employee in Estonia

Paying an Estonian as a contractor saves the 33.8%, and that same 33.8% is what could be claimed back if a full-time, single-client contractor turned out to be an employee. Hand that risk to a contractor of record if you need to; contractor payment platforms keep it with you.