Labour market

Considerations for the investor:

  • Trade unions and employers generally have a cooperative relationship; strikes are rather unusual in Estonia.
  • Social security contributions (33.8%) calculated from the gross employment income are payable by the employer.
  • Employees do not make any personal social tax contributions. Employee’s part of unemployment insurance contributions and compulsory accumulative pension contributions are withheld from the gross income by the employer.
  • Foreigners, residing in Estonia on the basis of residence permit, are, in general, permitted to work in Estonia. Separate work permits are not issued.
  • Short-term employment of nonresidents from third countries must be registered with the Police and Border Guard Board beforehand.
  • Non-resident may act as a member of the management or supervisory board of Estonian legal entity without the registration.

The economically active population is approximately 700 thousand. About one third of them have higher education and 86% of adults speak at least one foreign language. For older generation the main foreign language is Russian and for younger adults English. Estonian students are amongst the best in Europe on their English language skills.

Structural unemployment continues to be an issue and there’s a continuous need for talent in sectors relying on skilled labour. At the same time there are 30 thousand people registered as unemployed and over 3,000 jobs available. The unemployment rate has been around 5% of total population in last few years

  • Unemployment (ILO):
    7.4% (2014)
    6.2% (2015)
    6,8% (2016)
    5,8% (2017)
    5,4% (2018)
  • Average wage:
    1005 EUR (2014)
    1065 EUR (2015)
    1146 EUR (2016)
    1221 EUR (2017)
    1310 EUR (2018)
  • Working time: 8 hours per day, 5 days per week
  • Age of retirement: 63 (both men and women), 65 starting 2017
  • General vacation: An employee is entitled to annual paid leave in the amount of 28 calendar days.

Useful Links:

Statistics Estonia: www.stat.ee
Estonian Unemployment Insurance Fund: www.tootukassa.ee
Ministry of Social Affairs: www.sm.ee
Labour Inspectorate: www.ti.ee
Doing Business in Estonia 2019