How to hire remote employees in


Estonia is a magnet for people who work remotely—it’s a magical part of Northern Europe. And, if you’ve found someone you’d like to hire there, you’re in the right place. By the end of this page, you’ll learn how to hire someone remotely in Estonia, no matter where your company’s based. And you’ll learn how to do it without paying thousands in fees.

Country snapshot

Euro (EUR)

What to know before you hire in 


When you hire abroad, you have to make a decision: Should you hire talent as employees, or as contractors? Both have their advantages and disadvantages. Below, we’ll give you the information you need to make a decision.

If you want to successfully hire in 


, you have two options:

Hire talent as contractors

Laws about hiring contractors are significantly more simple in 


. Onboarding talent takes days, not weeks or months. Both you, the company, and your talent have more flexibility. And in many cases, since you’re remote, the talent you’re hiring is better classified as a contractor, anyway. Of course, it’s not possible in every case, but it’s what we built Panther for.

Hire talent as employees

This is the long route. You can either establish a physical presence with an entity and register as an employer, or you can use an Employer-of-Record (EOR) solution. Odds are, you’ll find using an EOR to be the easier route. Still, using an EOR in 


 is expensive—it can often be $500 per month per employee—and sometimes prone to lengthy onboarding times.

Why hire independent contractors in 


Hiring contractors is normally the easier, faster, more flexible choice—but don’t just take it from us. Below are the specific benefits and drawbacks to hiring contractors in 



It’s the fastest way to hire globally

Hiring employees takes months, at the minimum. When you hire with Panther’s locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.

It’s a lot cheaper

It costs just $0 to sign up for Panther, then $49 per month to hire your contractors with Panther. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.

It’s more flexible for you & your team

Hiring contractors in 


 means you’re generally not on the hook for things like health insurance and paid time off. This makes hiring flexible for you, and it gives your talent more options.

Can be less risky than hiring employees

Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.

Some people want to be employees

The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.

You might not have as much control over your talent

Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.

How can I pay people in 



If you’re hiring contractors in 


, you can pay them with Panther in a single click. You won’t need to worry about complicated wire transfers, fees, or currency conversions. We’ll take care of it all. Just make a click and your contractor will get paid in their currency of choice. This is a valuable bonus for talent in countries where the local currency is particularly weak—most people appreciate the ability to receive their payment in stronger currencies.

Hiring and paying your team in 


Hire and pay with Panther

Pay everyone with a single click
Get great currency conversion rates
Pay $0 in platform fees
Run payroll in seconds
Let Panther automatically create & store invoices
Let Panther automatically write locally-compliant contracts
Let Panther automatically file local tax documents

Hire and pay without Panther

Pay all your contractors individually
Do all currency conversions yourself
Shoulder the burden of platform fees
Spend hours each month making payments
Manually track & store invoices
Manually write & sign contracts
Manually file relevant tax documents

Let Panther save you from hiring headaches.

Sign up today for $0

If you want to hire employees in 


If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Estonia than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Estonia

Taxes in 


Employer tax

Employer Contributions

  • 33.8%

Individual tax


Paid Time Off (PTO)

Employees are entitled to 28 days of paid leave per year.

Public Holidays

There are 12 public holidays.

Sick Days

Employees are entitled to up to 182 paid sick leave days per year, paid at a rate of 70% of the employee’s previous years’ average salary.   

Sick leave is paid starting from the 4th day of illness and is paid by the employer.  From the 9th day onward, sick pay is paid by health insurance.  

Maternity Leave

Maternity leave is 20 weeks (140 days) in Estonia and a mother may begin taking this 70 days before the expected due date of the child.  Health insurance pays the maternity allowance which is paid at a rate of 100%.

Childbirth allowance- When a child is born, an allowance of 320 EUR is granted.  If triplets are conceived, the amount is 1,000 EUR per child. 

Paternity Leave

Fathers are entitled to 10 working days and can be taken within 2 months of the expected due date of the child. After the birth, the father is entitled to 2 months’ paternity leave. Pay is based on the average wage of the employee. The father is entitled to 100% of their regular wages, however, is capped at 3 times the minimum wage.

Parental Leave

In Estonia, paid parental leave can be taken until the child reaches the age of 3. The mother or father is able to take 435 days of consecutive or inconsecutive leave. However, only one parent can take this leave at a time.

Other Leave

Adopter’s leave: a person who adopts a child under the age of 10 is entitled to paid leave based on the employee’s average salary.

Child care leave: a mother or father is able to take paid leave (pay is equal to the minimum wage) and varies based on the age of the child:

  • Up to 2 children under the age of 14 – 3 days of leave
  • 3+ children under the age of 14- 6 days of leave

For parents with a disabled child- the mother or father is able to take off an additional day of work each month until the child reaches the age of 18.  This leave is also compensated based on the minimum wage.

Marriage Leave


Bereavement Leave



Termination Process

The termination procedure differs based on the type of termination:

  • Immediate termination- an employer is able to terminate an employment agreement immediately in the event of gross misconduct.
  • Employee resignation- An employee can terminate an employment agreement with written notice for an indefinite or definite contract. In this case, the employee would need to give between14- days- one months’ notice.
  • Termination with notice- If the employer initiates the termination of an employment agreement, the notice period is determined based on the duration of the employment

Notice Period

Notice period varies based on the duration of the employment:

  • Less than 1 year – 15 days’ notice
  • 1-5 years of employment- 30 days’ notice
  • 5-10 years- 60 days’ notice
  • 10+ years- 90 days’ notice

It is also possible to give pay in lieu of notice.

Severance Pay

In the case of termination due to redundancy, the employee is entitled to the average of the previous 6 months’ salary.

For fixed-term contracts that were terminated due to redundancy, the employee is entitled to the wages that they would have received from the date of termination to the expiry date of the contract.

Employees who have been employed for 5-10 years are entitled to an additional month’s salary.  For employees who have been employed for 10+ years, they are entitled to an additional 2 months’ salary.

Probation Period

The probation period cannot be more than 4 months.

For fixed-term contracts, the probation period cannot be more than half of the term of the contract.

If an employer decides to terminate an employment contract during the probation period, the employer must give the employee 15 days’ written notice.

Employee requirements in 


Working Hours

A full workweek in Estonia is 40 hours for employees over the age of 18.


In general, overtime must be agreed upon by the employee and employer.  Overtime hours cannot exceed a total of 8 hours within a 7-day period.   

However, the employee and employer may agree that overtime over a 4-month time frame can average 12 hours for every 7 calendar days.  This agreement may be canceled at any time by the employee so long as 2 weeks’ notice is given.  

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