Estonia

Overview of Estonia

Estonia is the northern most of the Baltic countries. It is situated on the eastern shore of the Baltic Sea. It is one the least populated places on Earth and is only slightly larger than Denmark with 50% of its area covered by forest. It has the fourth smallest population in the European Union and the eighth smallest land area. Estonia ranks third in having the most start-ups per capita. The capital of Estonia is Tallinn. The official language is Estonian although Russian is also widely spoken. Estonia ranks second in the world with a literacy rate of 99.8%. Estonia is also the homeland of Skype and Hotmail.

The Estonian business attitude has been influenced by the Scandinavian countries in recent years as Estonians were eager to embrace western culture after regaining their independence from the communist regime. Estonians want to be winners in business and show that they are competent. They do not really indulge in small talk but get straight to the point. Estonians do business with companies, not people and they do not feel they need a personal relationship before a business arrangement can be reached.

Currency of Estonia

• Euro

Health Insurance and the Social Security system of Estonia

Estonia has a solidarity-based social insurance system. The public healthcare is available to everyone. An employee is registered in the Estonian Health Insurance Fund as soon as he starts work and the employer is paying social taxes. To be able to have access to a family doctor and in order to have one’s family also covered by the health insurance, one’s address needs to be registered.

Private healthcare is also available.

Employer cost of Estonia

The cost for an employer to hire someone in Lithuania is a plus of 1.77% to the gross salary.

Salary and bonuses of Estonia

Regular employees are paid monthly.

Commissions, incentives, and bonuses are variable and will be agreed upon directly with the employer.

Public Holidays in Estonia

• January 1^st – New Year’s Day
• February 24^th – Independence Day
• moveable – Easter (Good Friday and Easter Sunday)
• May 1^st – Labour Day
• moveable – Whitsunday
• June 23^rd – Victory Day
• June 24^th – Midsummer Day
• August 20^th – Restoration Independence Day
• December 24^th – Christmas Eve
• December 25^th and 26^th – Christmas

Working Hours in Estonia

Office hours are from 9:00am to 6:00pm, Monday to Friday.

A regular work week is 40 hours.

Overtime must be agreed upon between an employer and the employee. It cannot exceed 8 hours over a consecutive 7 day period.

Vacation in Estonia

Estonians are entitled to 28 days of annual leave.

Sick Leave in Estonia

When an employee falls ill in Estonia, he/she is entitled to 182 days of sick leave. The first 3 days are not paid but starting from the 4^th, the employer pays sick leave which is 70% of the employee’s regular wage. After the 9^th day, the sick pay is paid by the health insurance.

Termination/Severance in Estonia

When terminating an employee in Estonia, it can either occur through immediate dismissal due to gross misconduct, employee resignation or termination with notice.

The notice period is based on the duration of the employment:

• less than 1 year: 15 days notice
• 1-5 years employment: 30 days notice
• 5-10 years: 60 days notice
• 10+ year: 90 days notice

If an employee get terminated due to redundancy, the employee is entitled to 1 months wages of severance pay. Employees who were employed for 5-10 years receive an additional month’s salary from the Unemployment Insurance Fund (Töötukassa). For emloyees who have been employed for more than 10 years, the Fund pays an additional 2 months salaries.