# Holiday, sick pay, working time and ending employment in Estonia

The rules an Estonian employer meets once staff are on the payroll: annual holiday and holiday pay, sick pay, working time and overtime, and the end of a contract by redundancy, for a reason linked to the employee or by agreement, with notice, compensation, the final pay and the employment register.

Law as of 30 Sept 2026. General information, not advice for your situation.

Once a company has staff, the Employment Contracts Act sets the minimum holiday, the working time limits and the rules for ending the relationship. An employer can never end a contract "ordinarily": every termination needs a ground in the Act ([Employment Contracts Act § 85(5), § 87](https://www.riigiteataja.ee/en/akt/510072026004)). This guide covers the day-to-day rules and the end of employment, with the taxes and the register entries that go with them. A board member without an employment contract is not an employee, and most of these rules do not apply to him.

**In short**

- Annual holiday is at least 28 calendar days. Holiday pay is the average pay of the last six months, paid before the holiday.
- Sick days 1 to 3 are unpaid; the employer pays days 4 to 8 at 70 percent; the Health Insurance Fund pays from day 9.
- Full time is 40 hours a week. Night work is paid at 1.25 times and public holiday work at 2 times, unless agreed otherwise.
- On a redundancy the employer gives 15 to 90 days' notice and pays one month's average wage.
- Everything owed falls due on the last day. Register the end of work within ten days with the correct ground.
- A pregnant employee and a person on family leave are strongly protected against dismissal.

## Holiday and holiday pay

The basic annual holiday is **28 calendar days**. Public holidays that fall in the holiday do not use up holiday days ([Employment Contracts Act § 54(3), § 55](https://www.riigiteataja.ee/en/akt/510072026004)). An employee with partial or no work capacity gets 35 days ([§ 57](https://www.riigiteataja.ee/en/akt/510072026004)). A minor also gets 35 days until 31.12.2026; from 01.01.2027 a minor gets the ordinary 28 days ([§ 56](https://www.riigiteataja.ee/en/akt/510072026004); [amending act, RT I, 03.07.2026, 27](https://www.riigiteataja.ee/akt/103072026027)).

- **Earning it.** Holiday is earned for time worked; sick leave and holiday count, parental leave and agreed unpaid leave do not. In the first year the employee can demand the holiday after six months with the employer ([§ 68(1)-(4)](https://www.riigiteataja.ee/en/akt/510072026004)).
- **Splitting it.** Only by agreement, and one part must be at least 14 consecutive days ([§ 68(5)](https://www.riigiteataja.ee/en/akt/510072026004)).
- **The schedule.** The employer makes a holiday schedule for each year and announces it in the first quarter. Holiday outside the schedule needs 14 calendar days' notice from the employee ([§ 69](https://www.riigiteataja.ee/en/akt/510072026004)).
- **Carry-over and expiry.** Unused days move to the next year. The claim expires one year after the end of the year it was earned for, so 2025 holiday can be used until 31.12.2026 ([§ 68(5)-(6)](https://www.riigiteataja.ee/en/akt/510072026004)). Expiry is suspended during family leave and conscript service.
- **No cash instead.** Paying money in place of holiday during employment is void; money is due only on termination ([§ 70(3)](https://www.riigiteataja.ee/en/akt/510072026004)).

**Holiday pay** is the pay of the six calendar months before the holiday divided by the calendar days of that period, minus public holidays and days of absence. If only an unchanged fixed salary was paid in those months, the salary simply continues ([average wage regulation § 1, § 2, § 4](https://www.riigiteataja.ee/akt/122052024004)). It is paid no later than the second-to-last working day before the holiday, unless agreed otherwise ([Employment Contracts Act § 70(2)](https://www.riigiteataja.ee/en/akt/510072026004)). It is wages, with every payroll tax. One exception: for a minor (until 31.12.2026) and for an employee with partial or no work capacity, the holiday pay for the days above 28, up to 7 days a year, is reimbursed by the state if the employer applies to the Social Insurance Board within three months; that part carries income tax only and is TSD payment type 16 ([Employment Contracts Act § 66](https://www.riigiteataja.ee/en/akt/510072026004); [Social Tax Act § 3](https://www.riigiteataja.ee/en/akt/525052026001)).

Compute it with the [holiday pay calculator](https://oscaraccountant.com/en/tools/holiday-pay-calculator).

## Sick pay

| Days of the sick leave | Who pays                  | Amount                                                                                                         |
| ---------------------- | ------------------------- | -------------------------------------------------------------------------------------------------------------- |
| 1 to 3                 | Nobody                    | Unpaid                                                                                                         |
| 4 to 8                 | The employer              | 70 percent of the average wage                                                                                 |
| From 9                 | The Health Insurance Fund | 70 percent of the previous year's average daily income, at most 126.87 euros a day in 2026, for up to 182 days |

Sources: [Occupational Health and Safety Act § 12²](https://www.riigiteataja.ee/akt/103072026046); [Health Insurance Act § 54-57](https://www.riigiteataja.ee/en/akt/522042026001). The Health Insurance Fund explains the benefit on [its sickness benefit page](https://www.tervisekassa.ee/inimesele/huvitised/haigushuvitis).

- **Tax.** The employer's sick pay carries income tax only: no social tax and no unemployment insurance ([Social Tax Act § 3](https://www.riigiteataja.ee/en/akt/525052026001); [Unemployment Insurance Act § 40(2)](https://www.riigiteataja.ee/en/akt/531052026001)). It is TSD payment type 24.
- **Top-ups.** The employer may add a voluntary top-up on the same tax terms, within the limits of § 12³ of the Occupational Health and Safety Act: in effect, up to the average wage ([§ 12³](https://www.riigiteataja.ee/akt/103072026046)).
- **Do not keep the full salary running.** Pay above those limits for the days of the sick note is social-taxed income, and the employee then loses the Fund's benefit for those days ([Health Insurance Act § 60](https://www.riigiteataja.ee/en/akt/522042026001)).
- **Your duty.** Fill in the employer's part of the electronic sick note within seven calendar days after learning that it is closed ([Health Insurance Act § 53](https://www.riigiteataja.ee/en/akt/522042026001)).

**Care notes** for nursing a child under 12 are paid by the Fund from the first day, at 80 percent, for up to 60 days ([Health Insurance Act § 54, § 56, § 59](https://www.riigiteataja.ee/en/akt/522042026001)).

## Working time and overtime

- **Full time** is presumed to be 40 hours in seven days and 8 hours a day ([Employment Contracts Act § 43](https://www.riigiteataja.ee/en/akt/510072026004)).
- **The ceiling.** Total working time, overtime included, may not exceed 48 hours a week on average over up to four months, or 52 hours by an agreement the employee may end with two weeks' notice ([§ 46](https://www.riigiteataja.ee/en/akt/510072026004)).
- **Rest.** At least 11 consecutive hours of daily rest and 48 hours of weekly rest, or 36 under summarised working time ([§ 51, § 52](https://www.riigiteataja.ee/en/akt/510072026004)). A working day longer than 6 hours includes a break of at least 30 minutes ([§ 47](https://www.riigiteataja.ee/en/akt/510072026004)).
- **Shorter days.** The working day before New Year, Independence Day (24 February), Victory Day (23 June) and Christmas Eve is shortened by three hours ([§ 53](https://www.riigiteataja.ee/en/akt/510072026004)).

**Overtime** needs the employee's agreement, except in unforeseen circumstances. It is compensated with equal time off, or with 1.5 times the pay only if agreed ([§ 44](https://www.riigiteataja.ee/en/akt/510072026004)). Overtime is banned for minors.

**Night and public holidays.** Night work (22.00 to 6.00) is paid at 1.25 times, and work on a public holiday at 2 times, unless other compensation is agreed ([§ 45](https://www.riigiteataja.ee/en/akt/510072026004)).

Two options for a start-up:

- **Independent decision-maker** ([§ 43²](https://www.riigiteataja.ee/en/akt/510072026004)). A written agreement with an employee who is fully free to organise his own time and earns at least the Estonian average gross monthly wage of the previous quarter. It switches off, among others, the night and public holiday premiums, but not the overtime rules or the 48-hour average.
- **Flexible working time** ([§ 43³](https://www.riigiteataja.ee/en/akt/510072026004)). A written agreement with at least 10 guaranteed hours a week plus optional hours, for pay of at least 1.2 times the hourly minimum wage.

The [working hours calendar](https://oscaraccountant.com/en/tools/working-hours-calendar) gives the hours of each month.

## Redundancy

A redundancy needs a real economic reason, notice of 15 to 90 days depending on the length of service, and redundancy pay of one month's average wage from the employer ([Employment Contracts Act § 89, § 97(2), § 100(1)](https://www.riigiteataja.ee/en/akt/510072026004)). After five years with the employer, the Unemployment Insurance Fund adds one or two months' pay ([Unemployment Insurance Act § 14¹-14²](https://www.riigiteataja.ee/en/akt/531052026001)).

Read the full answer: [redundancy pay and notice](https://oscaraccountant.com/en/guides/termination-leave-working-time/redundancy-pay).

## Dismissal for insufficient skills

The ground exists, but it is hard to prove. The employee must have failed to cope with the work **for a long time** because of insufficient skills, unsuitability or failure to adapt ([Employment Contracts Act § 88(1)](https://www.riigiteataja.ee/en/akt/510072026004)). The conditions add up:

- a **warning** first, unless good faith makes it pointless ([§ 88(3)](https://www.riigiteataja.ee/en/akt/510072026004));
- an offer of **other work or training** first, if the cost is not disproportionate ([§ 88(2)](https://www.riigiteataja.ee/en/akt/510072026004));
- notice within a **reasonable time** after the employer learned of the ground ([§ 88(4)](https://www.riigiteataja.ee/en/akt/510072026004));
- a written notice with the reason, and the notice period of § 97(2) ([§ 95, § 97](https://www.riigiteataja.ee/en/akt/510072026004)). No redundancy pay is due.

The employer carries the burden of proof. A dismissal shortly after probation is hard to defend, because probation is the time the law gives to assess skills. Check when probation really ended: sick leave and holiday extend it ([§ 10¹(4)](https://www.riigiteataja.ee/en/akt/510072026004)).

The employee has 30 calendar days from the notice to go to the Labour Dispute Committee or court ([§ 105](https://www.riigiteataja.ee/en/akt/510072026004)). If the termination is void, the usual result is the end of the contract with three months' average wage ([§ 107, § 109](https://www.riigiteataja.ee/en/akt/510072026004)).

## Termination without notice

**By the employer.** For a serious reason linked to the employee, the employer may end the contract without notice when continuing until the end of the notice period cannot reasonably be expected ([Employment Contracts Act § 97(3)](https://www.riigiteataja.ee/en/akt/510072026004)). The grounds include breaching duties despite a warning, being intoxicated at work despite a warning, theft or fraud, culpably causing significant damage, and breaching confidentiality or a non-compete ([§ 88(1)](https://www.riigiteataja.ee/en/akt/510072026004)). A warning is needed unless the breach is so grave that good faith does not require one, and the employer must act within a reasonable time ([§ 88(3)-(4)](https://www.riigiteataja.ee/en/akt/510072026004)).

**By the employee.** The employee may leave without notice for a serious breach by the employer, such as a significant delay in pay ([§ 91(2)](https://www.riigiteataja.ee/en/akt/510072026004), [§ 98(2)](https://www.riigiteataja.ee/en/akt/510072026004)). The employer then owes three months' average wage ([§ 100(4)](https://www.riigiteataja.ee/en/akt/510072026004)).

The notice is in a form that can be reproduced in writing, with the reasons ([§ 95](https://www.riigiteataja.ee/en/akt/510072026004)). It cannot be backdated: it takes effect when the other party receives it ([General Part of the Civil Code Act § 69(1)](https://www.riigiteataja.ee/en/akt/523012025003)).

## Final pay and the employment register

On the last day the employer pays everything owed ([Employment Contracts Act § 84(1)](https://www.riigiteataja.ee/en/akt/510072026004)): wages to date, compensation for unused unexpired holiday ([§ 71](https://www.riigiteataja.ee/en/akt/510072026004)), any redundancy or short-notice compensation, and any sick pay that has fallen due.

- **Set-off.** If the employee used more holiday than he earned, the employer may withhold the pay for the unearned days. Other set-offs need the employee's consent given after the right of set-off arose ([§ 78](https://www.riigiteataja.ee/en/akt/510072026004)).
- **TSD.** Declare the payments by the 10th of the following month. Wages and holiday compensation are payment type 10; statutory termination compensation is type 33, with no unemployment insurance; employer sick pay is type 24 ([TSD regulation, annex 1](https://www.riigiteataja.ee/akt/120122025048)).
- **Register.** Register the end of work within ten days ([Taxation Act § 25²(4)](https://www.riigiteataja.ee/en/akt/511082026003)), with the ground that matches the documents. The Unemployment Insurance Fund reads it, so "resigned" in place of "redundancy" blocks the employee's benefit. The company can correct its own entry for three months ([§ 25⁶](https://www.riigiteataja.ee/en/akt/511082026003)).

A wage claim can be brought for three years ([Employment Contracts Act § 29(9)](https://www.riigiteataja.ee/en/akt/510072026004)). Keep the signed agreement or the written notice with its reason and date.

## Protected employees

Dismissal is banned for these reasons, among others: pregnancy or the right to maternity leave, family duties and family leave, a short-term illness, employee representation, and a request for flexible working conditions ([Employment Contracts Act § 92(1)](https://www.riigiteataja.ee/en/akt/510072026004)). For a pregnant employee, a parent of a child under three and some other groups, the termination is presumed to be for a banned reason unless the employer proves a lawful one ([§ 92(2)-(4)](https://www.riigiteataja.ee/en/akt/510072026004)).

Absolute limits ([§ 93](https://www.riigiteataja.ee/en/akt/510072026004)):

- a pregnant woman, a woman entitled to maternity leave, and a person on paternity, adoption or parental leave cannot be made redundant, except when the employer's activity ends, when bankruptcy is declared and the activity ends, or when bankruptcy proceedings end by abatement without a declaration of bankruptcy;
- a pregnant woman, or one entitled to maternity leave, cannot be dismissed for insufficient skills.

The protection applies if the employee tells the employer of the pregnancy or the leave before the notice or within 14 calendar days after it. If a court ends the contract of a pregnant employee or an employee representative, the compensation is 12 months' average wage ([§ 109(2)](https://www.riigiteataja.ee/en/akt/510072026004)). Before any termination, ask in writing whether the employee is in a protected group.

## Non-compete agreements

Without an agreement, the employer cannot stop an employee from working for others ([Employment Contracts Act § 23(1)](https://www.riigiteataja.ee/en/akt/510072026004)). A non-compete agreement is valid only to protect a special business interest, such as clients or trade secrets, and must be reasonably limited in place, time and subject ([§ 23(2)-(4)](https://www.riigiteataja.ee/en/akt/510072026004)).

**After employment** it is valid only if it is in writing, lasts at most one year from the end of the contract, and the employer pays a reasonable monthly compensation ([§ 24](https://www.riigiteataja.ee/en/akt/510072026004)). The Act sets no percentage. The employer may cancel the agreement at any time with 30 calendar days' notice, which stops the payments ([§ 25](https://www.riigiteataja.ee/en/akt/510072026004)). Consider this at every termination.

The compensation is taxed like wages, even after the contract has ended ([Social Tax Act § 2](https://www.riigiteataja.ee/en/akt/525052026001)).

## Sale or merger of the business

When a business, or a unit of it, passes to a new owner and continues the same or a similar activity, the employment contracts pass to the acquirer unchanged by law, and neither side may dismiss because of the transfer ([Employment Contracts Act § 112](https://www.riigiteataja.ee/en/akt/510072026004)). This also applies in a merger or a division ([§ 112(2)](https://www.riigiteataja.ee/en/akt/510072026004), which sets aside [Law of Obligations Act § 181](https://www.riigiteataja.ee/en/akt/510092026001)). The employees keep their pay, length of service and holiday balances. These rules do not apply when the employer is declared bankrupt ([§ 112(4)](https://www.riigiteataja.ee/en/akt/510072026004)).

The transferor and the acquirer inform the employees' trustee, or the employees, at least one month before the transfer, and consult them when changes are planned ([§ 113](https://www.riigiteataja.ee/en/akt/510072026004)).

**A share sale changes nothing**: the company stays the employer. If the new owner later restructures, each termination needs its own ground, usually [redundancy](https://oscaraccountant.com/en/guides/termination-leave-working-time/redundancy-pay).

## Ending the contract by agreement

The employer and the employee may end any contract at any time by agreement, with no notice period ([Employment Contracts Act § 79](https://www.riigiteataja.ee/en/akt/510072026004)). Make it hold:

- **Put it in writing**: the end date, any payment, unused holiday, confidentiality, the return of equipment.
- **Mandatory items stay.** Unused holiday is still compensated, and all claims fall due on the end date ([§ 71, § 84](https://www.riigiteataja.ee/en/akt/510072026004)). A waiver of mandatory rights to the employee's detriment is void ([§ 2](https://www.riigiteataja.ee/en/akt/510072026004)).
- **Tax the payment correctly.** An agreed severance payment is not compensation provided by law. It is TSD payment type 10, with every payroll tax, unemployment insurance included ([Unemployment Insurance Act § 40](https://www.riigiteataja.ee/en/akt/531052026001)).
- **Register the right ground.** Register the end of work with the ground "agreement". Recording a redundancy instead, to protect the employee's benefit, is a false entry.

After an agreement the employee gets no income-based unemployment insurance benefit ([Unemployment Insurance Act § 6(2)](https://www.riigiteataja.ee/en/akt/531052026001)). He can still receive the base-rate benefit if he registers as unemployed and has at least eight months of insurance in the previous 36 months ([§ 6¹](https://www.riigiteataja.ee/en/akt/531052026001)). That is why a genuine redundancy should not be dressed up as an agreement, and why an agreement usually includes a negotiated payment.

General information, not advice for your situation. The law as in force on 30.09.2026.

## More on this topic

- [Redundancy pay in Estonia: notice periods and compensation when a job ends](https://oscaraccountant.com/en/guides/termination-leave-working-time/redundancy-pay): What an Estonian employer owes when it makes an employee redundant: a real economic reason, notice of 15 to 90 days, one month's average wage, the Unemployment Insurance Fund benefit after five years, the fixed-term rule, protected employees, and how each payment is taxed.

## Let Oscar do the work

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## Sources

- [Employment Contracts Act (English translation, Riigi Teataja)](https://www.riigiteataja.ee/en/akt/510072026004)
- [Occupational Health and Safety Act, §§ 12²-12⁴ (Riigi Teataja, Estonian)](https://www.riigiteataja.ee/akt/103072026046)
- [Health Insurance Act (English translation, Riigi Teataja)](https://www.riigiteataja.ee/en/akt/522042026001)
- [Unemployment Insurance Act (English translation, Riigi Teataja)](https://www.riigiteataja.ee/en/akt/531052026001)
- [Social Tax Act (English translation, Riigi Teataja)](https://www.riigiteataja.ee/en/akt/525052026001)
- [Taxation Act (English translation, Riigi Teataja)](https://www.riigiteataja.ee/en/akt/511082026003)
- [Law of Obligations Act (English translation, Riigi Teataja)](https://www.riigiteataja.ee/en/akt/510092026001)
- [General Part of the Civil Code Act (English translation, Riigi Teataja)](https://www.riigiteataja.ee/en/akt/523012025003)
- [Health Insurance Fund: sickness benefit](https://www.tervisekassa.ee/inimesele/huvitised/haigushuvitis)
- [Labour Inspectorate: working time](https://www.tooelu.ee/et/24/tooaeg)
- [Labour Inspectorate: final settlement](https://www.tooelu.ee/et/33/lopparve)
- [Government regulation on the conditions and procedure for the payment of average wages (Riigi Teataja)](https://www.riigiteataja.ee/akt/122052024004)
- [Act amending the Employment Contracts Act, RT I, 03.07.2026, 27 (Riigi Teataja)](https://www.riigiteataja.ee/akt/103072026027)
- [Minister of Finance regulation on the TSD forms (Riigi Teataja)](https://www.riigiteataja.ee/akt/120122025048)

## Related pages

- [Redundancy pay in Estonia: notice periods and compensation when a job ends](https://oscaraccountant.com/en/guides/termination-leave-working-time/redundancy-pay): What an Estonian employer owes when it makes an employee redundant: a real economic reason, notice of 15 to 90 days, one month's average wage, the Unemployment Insurance Fund benefit after five years, the fixed-term rule, protected employees, and how each payment is taxed.
- [Hiring employees in Estonia: contracts, registration and foreign staff](https://oscaraccountant.com/en/guides/hiring-employees): What an Estonian OÜ must do before its first employee starts: the written contract, fixed terms and probation, the employment register, the minimum wage and the employer cost, family members, board members, non-EU staff and interns.
- [The employment register (TÖR): who to register, by when, and what if you are late](https://oscaraccountant.com/en/guides/hiring-employees/employment-register): An Estonian company registers each employee, board member and service provider in the employment register (töötamise register, TÖR) no later than the start of work, and the end within ten days. Who is registered, what data, how to correct an entry, and the penalties.
- [Estonian holiday pay calculator](https://oscaraccountant.com/en/tools/holiday-pay-calculator): Work out an employee's holiday pay (puhkusetasu) in Estonia from the average calendar-day pay of the last six months, and the latest day to pay it.
- [Estonian working hours calendar](https://oscaraccountant.com/en/tools/working-hours-calendar): The working-hour norm of each month for a full-time employee in Estonia, with the public holidays and the shortened days before them.
- [Estonian salary calculator](https://oscaraccountant.com/en/tools/salary-calculator): Work out the net pay and the employer's total cost of an Estonian salary or board member fee, with income tax, the basic exemption, social tax, unemployment insurance and the funded pension.
- [TSD (income and social tax return)](https://oscaraccountant.com/en/glossary/tsd): What the TSD is: the monthly Estonian return for income tax, social tax, unemployment insurance and the funded pension, due on the 10th of the next month.

Reviewed on 10 Oct 2026. Law as of 30 Sept 2026. General information, not advice for your situation.

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