PEO & Employer of Record in Estonia | INS Global
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PEO in Estonia

Hire Globally, Pay Locally, Expand Effortlessly

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

With our PEO, you can establish your company, hire talented employees, and start operations in over 80 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.

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PEO in Estonia - Summary

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.

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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.

A PEO:
  • Decreases time spent
  • Lowers expenses
  • Bypasses potential administrative or legal pitfalls
  • Expertly utilizes local resources and expertise
Hiring an Overseas Employee

Testimonial

Manuel Ramos

TERAO ASIA

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.

5/5

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 EOR?

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

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%.

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FAQs

No, it is necessary to use a local entity abroad to comply with each country labor law.

Foreign companies can either set up a local entity in each country or use the services a local PEO (Professional Employment Organization) to hire the staff on-site directly.

The employer of record is the legal entity liable for the staff employed in a specific country. In practice, a foreign company can either open a subsidiary to become the employer of record of its abroad employees or use a PEO to act as the employer of record.

Liabilities may vary from country to country and include all the staff management responsibilities: labor contract issues, payroll management, and tax compliance, social security management, expenses claim declaration, hiring and termination
procedures, etc.

In general, 1-month is necessary to have an employee based out abroad using an existing PEO as the employe of record. When incorporating a new subsidiary to be the employer of record, the delay varies from 4-12 months.

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