What date does the law specify salary must be paid in Estonia?

In Estonia, salary payments must be made at least once a month. The law does not specify an exact date for these payments. However, if a scheduled pay date falls on a holiday, the salary must be paid on the preceding day.

How is salary calculated and what components does it consist of in Estonia?

In Estonia, the calculation of salary and its components may vary and include different elements such as:

• Fixed salary
• Hourly rate
• Percentage of turnover
• Piece-rate

The employer is required by law to withhold certain taxes and payments from the salary and other payments established in the employment agreement. These withholdings include:

• Income tax
• Employee’s part of unemployment insurance contribution
• Mandatory funded pension contribution

Additionally, the employer is responsible for paying:

• Social tax
• Employer’s part of the unemployment insurance contribution, which is calculated based on the employee’s salary

The employee should be aware that the amount and type of taxes and payments withheld or paid on their behalf by the employer may change in accordance with changes in relevant legislation.

Is there a legal obligation to pay salaries in the same month in Estonia?

No, there is no legal obligation to pay salaries in the same month in Estonia.

How many salary payments are made per year in Estonia?

In Estonia, based on our employment agreement template, wages are paid once per month.

Should the employment agreement specify salary in monthly or annual amounts in Estonia?

In Estonia, the employment agreement should specify the salary as a monthly amount. While the salary is paid on a monthly basis and should be indicated as such, the annual calculation may also be highlighted if necessary.

What tax and social security obligations do employees have in Estonia?

In Estonia, both employers and employees have specific tax and social security obligations:

Employees:

• Personal income tax is set at a flat rate of 20%.
• An unemployment contribution of 1.6% of the gross salary, which is withheld by the employer.
• For employees born after 1983, a contribution to mandatory funded pensions at a rate of 2% of the gross salary, also withheld by the employer.

Employers:

• Employers are responsible for withholding the unemployment contribution and mandatory funded pension contributions from the employees' gross salaries.

What is the minimum wage information in Estonia?

Effective January 1, 2025, in Estonia, the minimum hourly wage is EUR 5.31, and the minimum monthly wage for full-time work is EUR 886.