Employer of Record in Estonia & PEO Services | INS Global

Employer of Record in Estonia & PEO

Hire Globally, Pay Locally, Expand Effortlessly

INS Global is a local partner that seeks to provide international companies with global Human Resources outsourcing services.

A PEO (Professional Employer Organization) offers companies around the world a quick and safe way to expand their operations to overseas markets by taking charge of essential HR services. Through a PEO in Estonia, companies can hire and manage employees overseas in as little as 48h.

An Employer of Record (EOR) in Estonia provides companies with a cost-efficient and secure way to follow global expansion strategies by acting as the employer for oversees workers to simplify tax and compliance assurance responsibilities. For companies looking to boost their global mobility potential, INS Global’s EOR provides the perfect mix of experience and expertise in the international market.

With our PEO, you can establish your company, hire talented employees, and start operations in over 100 countries around the world, all without the inconveniences that traditionally come with global expansion.

Want to have a Team in Estonia TODAY?

Show me how to grow my business now!

We prefer to let others grow their business.

Want to have a Team in Estonia TODAY?

Show me how to grow my business now!

We prefer to let others grow their business.

Employer of Record in Estonia & PEO - Summary

Employer of Record in Estonia & PEO

What Are the Benefits of Using a PEO?

Ensured Legal Compliance

A PEO has a team of legal specialists that understand the minute details of the local law and regulations and will make sure that you can be in complete legal compliance every step of the way.

Shorter Set Up Time and Costs

Misunderstandings and mistakes with local regulations can lead to a surprisingly high occurrence of fees and fines. With the expert counsel of a PEO you can minimize and even all together avoid these errors

Focus on Target Goals

With a PEO taking care of your HR needs being taken care of, such as headhunting, payroll outsourcing, and contractor management, you will have more time to focus on your company goals and achieve market growth.

Fast Market Entry

On average it takes 4-12 months for company incorporation in a new country.

With a PEO, you can begin operations in the new location in just 2-5 days.


Streamlined Organization

Your PEO partner offers full support for all of your HR needs, streamlining your communications and organizational duties into a single point of contact

How is a PEO is Better Than Company Incorporation?

Bringing your company into a new foreign market is not an easy process; it demands a legal and physical presence to begin operations. A Global PEO helps you to avoid these issues and any other potential setbacks by operating as a legal intermediary for essential HR services.

  • Decreases time spent
  • Lowers expenses
  • Bypasses potential administrative or legal pitfalls
  • Expertly utilizes local resources and expertise

PEO/EOR vs Company Incorporation

The Advantage in Figures

PEO/EOR Company Incorporation
80% Less Expensive
Market Entry
2-5 Days
6 Months
Employee Turnover
Decrease by 14%
98% of the Current PEO Clients
Administrative Fees
Saves an Average of $450
Costly Payroll and Compliance Fines
Help Avoid
Company Growth Rate
7 - 9%
Closed During Pandemic
Employer of record Estonia


Manuel Ramos


Managing Director

We think INS Global is a good solution about starting business in new and complex markets. Understanding the market doesn’t mean you need to set up a company immediately.


How Does Our PEO in Estonia Operate?

INS Global’s PEO in Estonia can be used to manage your employee recruitment or assignment needs in 4 all-inclusive steps:

  1. Our professional advisors meet with you to understand your requirements and formulate a plan that will best satisfy your needs.
  2. We help to provide a legal entity through which you can bring in staff to begin operating in Estonia.
  3. Our team of experts take on all of the administrative and legal aspects of HR services and compliance, including hiring and payroll outsourcing.
  4. We handle all the details of HR services so that your staff can focus on  day-to-day operations and work towards your company’s success in the Estonian market.

A PEO or Employer of Record?

After you’ve decided to bring your company to Estonia and want to make the most of a PEO agreement, you need to be sure that you understand the difference between PEOs and EORs. This way you’ll be able to choose the one that best fits your business needs:

  • A PEO provides HR outsourcing services to employees in companies that want to expand globally.
  • These services include tax compliance, payroll outsourcing management, and regulatory assurance, and many more.
  • An EOR is a company that acts like a PEO while also legally and officially hiring employees on behalf of the company.
  • In addition to services provided by a PEO, an EOR is responsible for all liabilities associated with onboarding and employment.
  • With a PEO agreement, the contract remains between your company and the employee.
  • With an EOR agreement, the contract is directed by your company but made between the EOR and your employee.

Regardless of which one you prefer, INS Global offers both Professional Employer Organization and Employer of Record services in Estonia. Contact our team of experts today, or read this article to learn more about the specifics of these two services.

Labor Law in Estonia Updated to 2024

Employment Contracts in Estonia

In Estonia any working agreement longer than two weeks must have a written contract. The contract should detail all of  the employee’s duties and benefits. The contract language is Estonian and the currency should be in Euros.

Work contracts in Estonia typically are set for an unlimited period, unless the nature of the work is specified to be temporary, such as seasonal work. Probation periods cannot last longer than four months.

The notice time before terminating a contract with an employee ranges from 15 to 90 days, depending on how long the employee has been with the company.

Severance pay is usually one month of salary; if an employee has worked for 5-10 years for the employer, they will receive an additional month. For employees who have worked for over 10 years their severance pay includes two additional months.

Working Hours and Overtime in Estonia

A five-day, 40-hour working week is the norm in Estonia. Any work that is beyond 8 hours a day is counted as overtime, and must be compensated at 150% more than the regular wages.

Overtime work done at night (between 10 pm to 6 am) is compensated at 125%. Including overtime hours, a worker cannot be expected to work more than 13 hours in a single day. In one week the number of working hours may not exceed 48.

Annual Leave and Public Holidays in Estonia

There are 12 days of paid public holidays each year in Estonia. If an employee is asked to work on one of these holidays, it entitled them to an additional 200% of their usual wage.

Employees receive 28 days of paid vacation time per year. Unused vacation time may be carried over. The leave may be split and taken in increments of 14 days. Employers can stipulate that employees take no less than 7 consecutive days of leave.

Sick Leave in Estonia

Sick leave in Estonia is paid by both the employer and the state. The first three days of sick leave are unpaid; afterwards, from the fourth to the eighth day, the employer will compensate the employee with 70% of their salary.

From the ninth day and forward to a maximum of 128 days, the state covers the paid sick leave at 70% of the social security tax paid by the employee the year before. 

Maternity and Paternity Leave in Estonia

Maternity leave in Estonia is 140 days, or 20 weeks. These days of paid leave are covered by the state.

Paid paternity leave is a total of 10 days, and also covered by the state.

Adoptive parents are entitled to 70 days of paid leave if they are adopting a child under 10 years of age, and have received approval of adoption from the court.

Annual parental leave is 3 days for those with 2 or less children under the age of 14, and 6 days for those with 3 or more children under the age of 14. Before a child turns 3 years old parents, step-parents, and guardians are entitled to a total of 435 days of paid parental leave. All paid parental leave is covered by the state.

Tax Law and Social Security Contributions in Estonia

Income tax in Estonia is 20%; corporate tax is the same percentage, but may vary depending on specific situations. Employers in Estonia are also expected to pay taxes towards employee benefits:

  • 20% for pensions, and 13% for health insurance, totaling 33%.
  • Both employers and employees are expected to contribute towards unemployment benefits, with employers paying 0.8% and employees paying 1.6%.


Discover More Solutions in Estonia


The cost of specialized EOR services is determined in Estonia as a percentage of a coworker’s monthly salary. This cost covers all HR duties necessary to guarantee adherence to all regional employment laws.  

Managing employer responsibilities through an EOR is safe, legal, and effective without requiring a new local company structure in Estonia. EOR services accomplish this by having excellent HR assistance and in-depth knowledge of the local legal system. 

Your team members will be protected according to the law, receive accurate and timely monthly payments, and be qualified for all Estonian employee benefits when you use an EOR service agreement.  

Independent contractors who collaborate with clients through an Estonian EOR have total control over their work and could be entitled to many or all of the same benefits as regular employees or if they were working with an umbrella corporation. 

By employing their extensive professional networks, in-depth understanding of the available local business resources and standards, and rigorous adherence to ethical hiring procedures, our recruiting specialists can locate the best local Estonian personnel for your needs.  

As a result, it will be simpler and more efficient to integrate them into our Estonian EOR system rather than hiring these applicants through more traditional hiring practices. 

Through INS Global, you receive comprehensive compliance-assured employment outsourcing assistance from a truly international EOR services provider in Estonia. Employer of Record services abide by all pertinent local, state, and federal laws meaning you can pursue opportunities anywhere in the country 

Some Estonian PEO or EOR service providers may have stringent hiring criteria or a cap on the number of employees you hire simultaneously.  

However, your long-term business strategy could dictate that you fast scale up or down. Because INS Global is aware of this, you may work with us and hire as few or as many people as you need to achieve your objectives. 

The overall cost should include payroll expenses, hiring charges, signing bonuses, and other direct and indirect costs like incentive programs, handling the taxes of foreign employees, and social insurance. 

You won’t require a local site using Estonian PEO services, which could spare you from onerous incorporation rules.  

However, it is still a good idea to give your team the choice to work in a shared workspace or the freedom to do so whenever and wherever it’s most convenient. INS Global can also help to find appropriate working spaces in Estonia. 

We can deal with all the key differences, like visa and work permit regulations, whether Estonian citizens or foreigners are subject to specific local employment norms, tax legislation, or employee incentives.  

Businesses of all sizes, from SMEs to big organizations, may use EOR and PEO solutions to accelerate their expansion. Solutions for employment outsourcing make it possible to hire local or foreign workers in an effective and secure manner.  

Our services are simple to scale up to match the demand for new workers and can even replace more complex internal HR requirements.  

Businesses in a variety of industries that either don’t have their own structures in a target country (or desire to avoid cost-scaling issues while focusing on expansion) might benefit from the legal expertise offered by PEO and EOR services.  

Two more options that may be used to directly or indirectly hire independent contractors are staffing companies and umbrella corporations.  

The majority of independent contractors in Estonia work for themselves or own their own small enterprises. The use of labor agreements rather than employment contracts is required by Estonian legislation when recruiting contractors. 

Before starting work in Estonia, an independent contractor may be required to present a resume, portfolio, verified references, and a signed NDA. 

Payroll in Estonia is done monthly by most companies, though it may be more frequent, with employers managing tax and social security processes on behalf of their employees. 13th-month bonuses are not legally necessary but are often given as an incentive.  

In 2023, the minimum wage in Estonia is 725 euros per month (or 4.30 euros per hour).  

Estonian visas follow typical Schengen patterns as a country within the Schengen area. EU and EEA citizens can live and work in Estonia without additional requirements.  

For citizens of other countries, the following visas are available for work-related purposes: 

  • Short-Stay Visa/Schengen Visa – Valid for 90 out of 180 days, this visa is restricted to certain business operations, including attending meetings, conferences, and signing contracts.  
  • Long-Stay Visa/ Work Visa – Valid for 365 days, during which time the holder can apply for a 5-year temporary residence permit.  
  • EU Blue Card – A specialist EU-wide visa for highly-qualified professionals which is valid for up to 4 years.  

In Estonia, employers contribute a monthly amount towards their employees social security funds, equivalent to 33% of an employees gross salary. This amount covers the employer portion of the employees pension and health insurance funds.  

All employees in Estonia are eligible for healthcare, a business travel allowance, unemployment insurance, and annual paid leave. In addition, while not mandatory, its common practice for companies to offer paid sick leave, annual bonuses, and employee perks like gym memberships or meal cards.  

In Estonia, all changes to an employment contract must be agreed upon by both parties. 

Workers in Estonia pay social contributions towards a national mandatory healthcare service that employs healthcare professionals publically and privately. As a result, healthcare in Estonia is almost universal, with users paying only a small fee for most services.  

Employers must give all employees adequate notice before terminating an employment contract. This period begins at 15 days for employees in their first year of service (including during the probationary period). It increases to 30 days between 1-5 years, 60 days for service of 5-10 years, and 90 days for any time after this. Employees made redundant are eligible for 1 month of salary as severance pay, with an additional 1 or 2 months being provided by the employees social security fund.   

The Estonian Labor Inspectorate is in charge of ensuring that workers’ rights and workplace safety are upheld. 

There are typically 13 days of paid public holidays per year in Estonia