How to calculate vacation pay for employees in Estonia?

In Estonia, vacations are calculated according to a working year, which begins when an employee starts working with the employer. The annual leave is usually 28 days, and it is calculated in calendar days. An employee who has worked at least six months during the first working year is entitled to a vacation for each month worked.

Vacations are generally based on a vacation schedule, which the employer makes available for the employees usually within January but not later than by the end of first quarter. The parties can agree to any changes in the vacation schedule.

In general, the vacation schedule is drafted according to the interests of the employers. If possible, the employees’ interests are also considered. Vacation days can be taken in parts, but one part must be at least 14 consecutive days during the calendar year.

Vacation pay is based on:

  • The calendar days (which do not include public holidays and sick or vacation days)
  • The salary earned by the employee during the six months preceding the month in which the holiday pay is calculated.

How is the vacation pay calculated?

The holiday pay is calculated on the sum of a six-month salary divided by the number of the six-month calendar days to get the average calendar day value. The average calendar day value will be multiplied by the number of calendar days of the leave.

If the employee was paid a fixed salary during the six months preceding the month in which the holiday pay is calculated, the employer can decide whether to pay holiday pay according to the six-month average daily pay or the employee will be paid a fixed salary as holiday pay.

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John Doe

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