The number one employee benefits people in Estonia care about is health insurance. This is supplementary to the national healthcare service which can be subject to long waiting lists. When asked to rank three other common benefits in order of importance Estonian employees are likely to say retirement, death, and disability.

Asinta Partner
Natalia Zaborovska


More Info

Average Cost

The average cost for employee benefits for employers is about €50 per month.

Mandatory employee benefits in Estonia include a three pillar pension system, legislative leaves, employment insurance, and dental care. Common supplementary employee benefits in Estonia include health insurance, voluntary benefits, and gym memberships. Common employee perks include additional vacation days, and company cars.

Mandatory Employee Benefits in Estonia


Pension is a regular payment made in case of old age, incapacity for work or loss of provider. The aim of the Estonian pension system is to help people to maintain their standard of living and monthly income when they retire. The Estonian pension system stands on three pillars:

I pillar: State pension

II pillar: Mandatory funded pension

III pillar: Supplementary funded pension

I Pillar: State Pension

As the name says, the state pension is a pension paid by the state, the aim of which is to ensure regular monthly income for the persons who have reached the retirement age, have become incapable for work or have lost their provider.

There are several different types of state pensions: old-age pension, pension for incapacity for work and the survivor’s pension, national pension and superannuated pension.

The first pillar is the state old-age pension, which is paid to a person who has reached the pensionable age and whose length of employment is at least 15 years.

The general pensionable age in Estonia is 63 years, the pensionable age for women was gradually increased to 63 by the year 2016. By the year 2026, the general pensionable age in Estonia will be 65.

The state pension is based on the principle of solidarity, which means that the pensions to the today’s pensioners are paid from the taxes of people who are currently working. The state pension is paid by the state from the funds collected to the state budget from the social tax. The direct payer of the social tax is the employer who withholds 33% social tax from the salary of the employee, which the state then pays for health insurance and pensions.

II Pillar: Mandatory Funded Pension

The aim of the second pillar is to direct a part of the salary of the people who are working towards their personal pension, so that people would have, in addition to the constantly financed state pension, an additional pension that they accrue themselves.

In case of the mandatory funded pension, an employee pays a monthly 2% of their gross salary to the pension fund they have selected and the state adds 4% out of the current social tax that is paid by the employee.

The money paid into the pension funds is managed by the fund management companies who invest the pension contributions paid by the employees into different assets with the aim of increase the value of the money contributed by the employees over the years.

  • Subscribing to the funded pension is mandatory for persons who were born in 1983 and later.

In case of the mandatory funded pension, when a person reaches the retirement age (as a general rule), a contract has to be concluded with an insurance company when. The insurance company undertakes the obligation to pay to the person a pension, the sum of which depends on the volume of the assets accrued into the pension fund, until the death of the person.

III Pillar: Supplementary Funded Pension

The third pillar or the supplementary funded pension was established with the aim of providing people with an opportunity to insure their retirement years even better.

There are two options for subscribing to the supplementary funded pension:

  • conclude a pension insurance contract with a life insurance company or
  • make contributions to the voluntary pension fund.

There are also two options for receiving payments:

  • Payments on the basis of the insurance contract or
  • Payments from the voluntary pension fund.

The sums of the contributions made to the supplementary funded pension can be determined by the person and the amount of the contributions can be changed at any time. If the contributions to the supplementary funded pension are less than € 6,000 or 15% of the gross income per year, no income tax is charged on the contributions.

Legislated Leaves

The duration of the annual vacation is 28 days, an extended vacation is granted in case of some professions, such as state officials and local government officials, teachers, academic, pedagogical and scientific staff and others. National holidays and public holidays are not included in the vacation duration calculations. An employee may be granted unpaid leave at his or her request for a period of time established by agreement of the parties.

  • Maternity leave – A woman is granted 140 days pregnancy and maternity leave, which may commence at least 70 days before the estimated birth date of the child. The maternity benefit is paid by the state.
  • Parental leave – A mother or a father shall be granted parental leave at her or his request for raising a child of up to 3 years of age. The parental benefit is paid by the state. Together the maternity benefit and the parental benefit are paid for a period of 575 days.
  • Sickness – in case of sickness, the employee can be given up to 182 calendar days of paid sick leave (max 250 days per year). The gross wage during this period is 70% of his or her last years` average salary. The employer pays the wage from the 4th to 8th day of sickness and the state starting the 9th day.

Employment Insurance

Unemployment insurance is a compulsory insurance that is collected to pay benefits to employees in the event of unemployment. All employees pay 1.6% of their gross earnings and employers pay 0.8% of the payroll for unemployment insurance. Unemployment insurance is withheld from the employees’ salary automatically. Persons, who are old enough to receive an old age pension do not have to pay unemployment insurance.

Unemployment insurance benefits are paid to legal residents of the EU. To receive an unemployment insurance benefit, unemployment insurance contributions must have been paid for at least 12 months of the previous 36 months.

A legal resident of the EU has the right to apply for an unemployment insurance benefit from the country where he or she last worked and paid taxes. The period of time that a person has worked and paid unemployment insurance contributions in other EU countries is considered when deciding whether and how long a person is entitled to receive the unemployment insurance benefit. The sum of the benefit paid by Estonia is calculated on the basis of the wages earned in Estonia.

If person does not meet the conditions to receive an unemployment insurance benefit, or if the person has exhausted its rights to a benefit, he/her may still qualify for the state unemployment allowance.

The unemployment allowance is paid to unemployed persons who:

  • Do not qualify for the unemployment insurance benefit
  • Actively look for work
  • Have worked or finished full-time studies
  • Have an income that is less than the allowance

The unemployment allowance (€9,42 per day in 2021) is paid for a maximum period of 270 days.

Dental Care

Dental care is free of charge for persons under the age of 19. Free dental care is provided only by doctors who have concluded the contract for financing medical treatment with the Health Insurance Fund.

The Health Insurance Fund will reimburse dental care to adults with health insurance up to 40 euro per year. The patients themselves pay at least 50% of the price of the services.

Pregnant women, mothers with children under one-year of age, old-age pensioners, persons receiving benefits for incapacity for work and people with partial or no ability for work, people over the age of 63 and people with an increased need for dental care will receive dental care benefit up to 85 euros per the calendar year. The patients themselves pay at least 15% of the price of the services.

Find more information here


Supplementary Employee Benefits


In Estonia, there are two types of health care systems: public and private. The public is provided by Estonian Health Insurance Fund (EHIF; Haigekassa in Estonian) which a person receives if they have an employment contract in Estonia and their employer is paying social taxes for them. The private one is different insurers offering private insurance for healthcare.

The Estonian health insurance system is a solidarity-based social insurance system. This means it provides healthcare for everyone. Estonia is quite covered by health care and treatment is equally available in all regions.

Check out the materials made by the Estonian Health Insurance Fund and the Health Board for more details.

Voluntary Benefits

People who do not belong to a group plan can sign a voluntary insurance contract with the Health Insurance Fund and pay the insurance premium. To enter into a contract with the Health Insurance Fund, two conditions must be met.

The person must be a permanent resident of Estonia or a person residing in Estonia on the basis of a temporary residence permit or the right of residence. They must also have been  insured for at least 12 months over a two-year period prior to signing the contract, through:

  • An employer
  • State
  • As a pupil or a student
  • As a sole proprietor or their spouse participating in their activities
  • As a notary, a sworn translator, or a bailiff registered with the Tax and Customs Board

The said insured persons may sign a voluntary insurance contract also to insure their dependents. A dependent must be a permanent resident of Estonia or a person residing in Estonia since a temporary residence permit or the right of residence.

The persons qualifying for the signature of the contract are those, who have paid social tax or for whom social tax has been paid during the preceding calendar year. Social tax must have been paid at least twelve times calculated based on a minimum monthly rate of social tax. In 2018, the social tax monthly rate was 470 euros, and thus, the monthly minimum social tax liability was 155.10 euros. This means that if you want to sign a voluntary insurance contract in 2019, the social tax received for you in 2018 must be at least 12 x 155.10 euros, i.e. a total of 1861.20 euros.

Persons receiving a pension from a foreign country also qualify for the signature of the contract, unless otherwise provided for by international agreements.


Very large employers can provide ‘gym on site’ facilities whereas smaller employers may offer gym subsidies or access to a gym with lower corporate rates. Supporting employees’ health has always been popular. Perks can range from small things such as fruit in the office, but a large proportion of employers also pay for gym memberships and supports employees who want to compete in athletic events such as marathons.

Workplace Canteens

This benefit is not common in Estonia, however, in highly competitive industries such as the technology industry we are seeing an increase in catered lunches for employees. Large employers often have an onsite cafeteria with discounted food prices.


Employee Perks

There are not many perks Estonian employers offer. Western and financial/technical companies are usually more generous. More traditional and local companies generally have an understanding that ‘salary is your benefit.’ The following perks some employers offer:

  • Additional vacation days – Typical holiday allowance is 28 days of paid holiday (mandatory by law). In the public sector, it’s typically 30-35 days. Any extra days would be considered a perk. Many companies offer extra days in the form of collective holidays when all the staff is away from the office and business is virtually closed down. During Christmas and summers for example.
  • Company cars – These are typically offered to salespeople and senior executives are offered for business and private use, but this is taxed. Reimbursement for use of personal cars is also a practice employers use, and the reimbursement runs about 0.30€ per kilometer (tax-free), but not more than 335 euros per month. If the reimbursement is more than 335€, the overpaid part is taxed.
  • Gym memberships – Supporting employees’ health has always been popular. Perks can range from small things such as fruit in the office, but a large proportion of employers also pay for gym memberships and supports employees who want to compete in athletic events such as marathons.
  • Health insurance– This is now offered by 3 insurers and 400€ per year per employee is not taxed by fringe benefits tax, there are debates whether this line will ever be popular since the state healthcare is good – but we will see after statistics come in summer. Health insurance usually covers in- and outpatient treatments, vision, and dental care. Massage and/or rehabilitation limits are also available, as well as some other extras.
  • Telecommuting – It’s very popular to let employees work from home, especially employees that use a phone and laptop for their work.
  • Personal Accident Insurance – This perk is getting more popular from our point of view. It usually covers death, disability, and traumas. It’s quite a cheap product as well.


Related Government Websites


This information about employee benefits in Estonia is provided by MAI CEE, Asinta’s employee benefits consulting Partner in Estonia.

Asinta Knowledge

Benchmarking Employee Benefits in Estonia 2021

Want an easy way to begin benchmarking employee benefits in Estonia for 2021? This 2021 market and benchmark insight report for Estonia is an easy... Read More

Estonia COVID-19 Employer Resources

Mandatory employee benefits in Estonia include a three pillar pension system, legislative leaves, employment insurance, and dental care. Common supplementary employee benefits in Estonia include... Read More

Estonia: Employee Perks: Customary Benefits and Perks in Estonia

Article provided by MAI-CEE, Asinta’s Partner in Estonia. The number one employee benefit Estonians care about is health insurance. This is supplementary to the national... Read More

Asinta: MAI CEE Country Pages Updated

Asinta Partner, MAI CEE, recently updated their Asinta country pages. Some of the changes were minor, while others underwent more significant updates. The country pages... Read More

Estonia: Asinta Business Etiquette Insight

Intending to conduct new business in Estonia?  We offer the following business etiquette tips to help smooth the way: Estonians are generally quiet and reserved... Read More