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Working time and overtime: an employer's guide to Estonia
40 hours a week, 8 hours a day — and one brand-new agreement that took effect in early 2026 that most guides still don't cover. Working time, overtime, rest, and attendance record retention in one place.
At the center of Estonian working time law are three numbers most employers already know — 40, 8, and 48 — and one they probably don’t: § 43³, because that provision was only added to the statute in February 2026.
TL;DR
- Normal working time is a 40-hour week and 8-hour day — go beyond that and you need an overtime agreement or averaged working time (Employment Contracts Act § 43(1)–(2)).
- Overtime needs its own agreement each time — paid back as time off hour-for-hour by default, or at 1.5× pay if you agree pay instead — and averaged working time must stay within 48 hours a week over the reference period (Employment Contracts Act §§ 44, 46).
- Night work pays a 1.25× supplement on top of normal pay (Employment Contracts Act § 45).
- Daily rest must be at least 11 hours, and weekly rest at least 48 hours under normal working time (Employment Contracts Act §§ 51–52).
- Keep attendance records for seven years — the retention period comes from the Accounting Act, not the Employment Contracts Act (Accounting Act § 12).
What counts as normal working time?
Normal working time is presumed to be 40 hours over a seven-day period and 8 hours a day (Employment Contracts Act § 43(1)–(2)).
This is a default, not a clause you have to write into the contract yourself — unless you’ve agreed a shorter (part-time) schedule, it applies automatically. You can’t simply agree a longer normal working time, except through the flexible working time agreement described below.
| Type of working time | Amount | Basis |
|---|---|---|
| Full-time (default) | 40 h / 7 days | Employment Contracts Act § 43(1) |
| Full-time, daily | 8 h / day | Employment Contracts Act § 43(2) |
| Part-time | shorter amount agreed by both parties | Employment Contracts Act § 43(1) |
Next step: check the working time line on every contract against what the person actually works — a mismatch here is the most common place overtime quietly builds up.
What is the flexible working time agreement?
The flexible working time agreement (paindliku tööaja kokkulepe) (Employment Contracts Act § 43³) is a brand-new instrument that took effect on 13 February 2026, letting you split an employee’s hours into agreed hours and additional hours.
It took effect after most existing guides, including the Labour Inspectorate’s own 2022 publication, were written, so you won’t find it described elsewhere yet.
Here’s the mechanism. The employer and employee agree in writing on the number of agreed hours and additional hours, the notice period for offering additional hours, and how the hours get reconciled at the end of the reference period (§ 43³(1)–(2), (7)). The employee can turn down any additional hours offered, and acceptance has to be confirmed in writing, in a reproducible format, each time (§ 43³(6)).
The agreement is only valid if both conditions are met at once: the employee’s hourly pay is at least 1.2 times the applicable minimum wage, and the agreed hours are at least 10 per seven-day period (§ 43³(3)). At the current minimum wage — 5.67 euros an hour from 1 April 2026 — that works out to roughly 6.80 euros an hour. That figure moves whenever the annual minimum wage regulation changes, so check the minimum before quoting this number to anyone.
| Condition | Requirement | Basis |
|---|---|---|
| Hourly pay | ≥ 1.2 × minimum wage (~€6.80/h currently) | Employment Contracts Act § 43³(3) |
| Agreed hours | ≥ 10 h / 7 days | Employment Contracts Act § 43³(3) |
| Agreed + additional hours combined | must not exceed full-time | Employment Contracts Act § 43³(4) |
| Hours worked beyond that | ordinary overtime | Employment Contracts Act § 43³(5) |
| If conditions are breached | the agreement is void | Employment Contracts Act § 43³(8) |
If an employee has actually worked more additional hours than agreed for most of the last six months, they can demand the agreed hours be raised (§ 43³(9)). Absent agreement, the new amount is calculated from the employee’s actual six-month average.
Next step: if you’re considering this agreement, draft a written document that addresses all five conditions in the table above separately — an incomplete agreement is simply void, not “close enough.”
How does averaged working time work?
Under averaged working time, an employee doesn’t have to work the same number of hours every week. The average can’t exceed 48 hours per seven-day period over the reference period, which defaults to up to four months (Employment Contracts Act § 46(1)).
| Reference period | Condition | Basis |
|---|---|---|
| Up to 4 months | default, no special agreement needed | Employment Contracts Act § 46(1) |
| Up to 12 months | via collective bargaining agreement, named sectors only | Employment Contracts Act § 46(2) |
| Up to 52 h average, over 4 months | agreed individually between the parties | Employment Contracts Act § 46(3) |
The 12-month reference period is only available to healthcare, social care, agriculture, road maintenance, and tourism workers, and only under a collective bargaining agreement — road maintenance workers were only added to this list in the 13 February 2026 amendment. Beyond that, the employer and employee can agree directly, without a collective bargaining agreement, on a higher average of up to 52 hours, but the agreement is void if it’s unreasonably detrimental to the employee (Employment Contracts Act § 46(3)). The employee can terminate it at any time, with two weeks’ notice. The employer must keep separate records for people working under this agreement and produce them on request for the labour inspector or the employees’ representative (§ 46(5)).
Next step: if your company uses averaged working time, write down which of the three rows you’re actually on — most companies default to assuming four months and discover too late that their schedule actually requires the 52-hour agreement to exist.
When does overtime apply, and how is it paid?
Overtime is time you and the employee have separately agreed on top of the agreed working time (Employment Contracts Act § 44(1)). It can’t be scheduled in advance or written routinely into a roster — each instance needs its own agreement.
| Situation | Rule | Basis |
|---|---|---|
| Default compensation | time off, hour for hour | Employment Contracts Act § 44(6) |
| Paid compensation (by agreement) | at least 1.5× pay | Employment Contracts Act § 44(7) |
| Agreement with a minor | void | Employment Contracts Act § 44(2) |
| Agreement with an employee on reduced hours due to a health hazard | void | Employment Contracts Act § 44(3) |
| Employer’s one-sided demand | only for unforeseen, business-related need | Employment Contracts Act § 44(4) |
A one-sided demand for overtime can’t be applied to a minor, a pregnant employee, or an employee entitled to pregnancy and maternity leave (§ 44(5)). Under averaged working time, overtime only becomes clear at the end of the reference period, once actual hours worked exceed the agreed total (§ 44(1)).
Next step: fix the method of compensation — time off or money — in writing before the overtime accrues, not after.
How much extra do you pay for night work and public holiday work?
You pay 1.25 times pay for night work (10 p.m.–6 a.m.), and twice pay for work on a public holiday, unless you’ve agreed that pay already covers it (Employment Contracts Act § 45(1)–(2)).
| Type of work | Extra pay | Basis |
|---|---|---|
| Night work (10 p.m.–6 a.m.) | 1.25 × pay | Employment Contracts Act § 45(1) |
| Public holiday work | 2 × pay | Employment Contracts Act § 45(2) |
| General hourly limit for night workers | max average 8 h / 24 h, per 7-day period | Employment Contracts Act § 50(1) |
| Night worker exposed to a health hazard | absolute max 8 h / 24 h, not averaged | Employment Contracts Act § 50(2) |
Both extra payments can be replaced with additional rest time by agreement (§ 45(3)). The general 8-hour limit for night workers can be averaged over a seven-day period. But for an employee whose health is affected by a workplace hazard or by the nature of the work, any agreement allowing more than 8 hours in 24 hours is void. That limit can’t be averaged or raised by agreement.
Next step: if you have shift workers, flag hazard-exposed roles separately on the schedule — the “it averages out” argument doesn’t hold when a single shift itself exceeds 8 hours.
How long does rest have to be, and when is a break unpaid?
Daily rest is at least 11 consecutive hours in 24 hours, and weekly rest is 48 hours under normal working time, but only 36 hours under averaged working time (Employment Contracts Act § 51(1), § 52(1)–(2)).
| Type of rest | Minimum | Basis |
|---|---|---|
| Daily rest | 11 h / 24 h | Employment Contracts Act § 51(1) |
| Weekly rest, normal working time | 48 h / 7 days | Employment Contracts Act § 52(1) |
| Weekly rest, averaged working time | 36 h / 7 days | Employment Contracts Act § 52(2) |
| Break for a working day over 6 hours | at least 30 min | Employment Contracts Act § 47(2) |
| On-call time | at least 1/10 of agreed pay | Employment Contracts Act § 48(1) |
48 and 36 hours are two different floors, not the same rule worded differently, and that’s exactly where payroll mistakes happen: someone assumes 48 hours applies to an averaged schedule too. A break for a working day over 6 hours is generally unpaid and doesn’t count as working time. The exception: work whose nature makes a break impossible, provided the employer still lets the employee rest and eat during working time (§ 47(2)). On-call time — being available to the employer outside working time under an agreement — has to be paid at least a tenth of the agreed pay, even if no actual work is done (§ 48(1)). Time the employee actually spends working, though, counts as working time in full (§ 48(3)).
Next step: check your shift schedules against both rest-time floors, not just the total hours — a schedule can meet the hourly norm and still breach the rest requirement.
What happens on the working days before public holidays?
The working day before New Year’s Day, Independence Day, Victory Day, and Christmas Eve is shortened by 3 hours (Employment Contracts Act § 53).
This shortening only applies before those four days, not before every public holiday, and it can’t be excluded even by averaged working time or a collective bargaining agreement.
| Public holiday | Date |
|---|---|
| New Year’s Day | 1 January |
| Good Friday | movable |
| Easter Sunday | movable |
| Spring Day | 1 May |
| Whit Sunday | movable |
| Victory Day | 23 June |
| Midsummer Day | 24 June |
| Restoration of Independence Day | 20 August |
| Christmas Eve | 24 December |
| Christmas Day | 25 December |
| Boxing Day | 26 December |
(Public Holidays Act § 2.) There are 11 public holidays, not 10 — Christmas Eve was only added to the list in 2005, and some older summaries still leave it out.
Next step: mark these four shortened days directly into your work schedule templates — manual memory is exactly where this requirement gets missed.
What can a collective bargaining agreement change, and what can’t it?
By default, any deviation from the Act that disadvantages the employee is void unless otherwise agreed — only the specific deviations listed below are allowed (Employment Contracts Act § 2).
| What a collective bargaining agreement can change | Basis |
|---|---|
| Extending the reference period to up to 12 months (named sectors) | Employment Contracts Act § 46(2) |
| Shifts of up to 24 hours and split rest periods (roles covered by the EU Working Time Directive) | Employment Contracts Act § 51(3)–(4), (6) |
| What it can’t change | Basis |
|---|---|
| The 11-hour daily rest floor | Employment Contracts Act § 51(1), § 2 |
| The 48/36-hour weekly rest floor | Employment Contracts Act § 52(1)–(2), § 2 |
| The 1.25× night work and 2× public holiday extra pay | Employment Contracts Act § 45, § 2 |
| The 1.5× rate for paid overtime compensation | Employment Contracts Act § 44(7), § 2 |
| The minimum 1/10 pay for on-call time | Employment Contracts Act § 48(1), § 2 |
Separately and individually — not through a collective bargaining agreement — you can deviate in writing from the night work, break, on-call, and rest rules. This is only possible with a so-called autonomous decision-maker: an employee who organises their own working time and whose pay is at least the national average gross monthly wage (Employment Contracts Act § 43²). This is a narrow, individual exception, not a general option available through collective bargaining.
Next step: if your collective bargaining agreement claims to regulate anything in the table above, check the specific statutory reference before relying on that clause — by default, the floor is absolute.
How long do you have to keep attendance records, and what does that mean?
You have to keep attendance records (Employment Contracts Act § 28(2).4); neither a format nor a retention period appears there — both come from a different statute entirely.
| Obligation | Requirement | Basis |
|---|---|---|
| Keeping attendance records | mandatory, format not specified | Employment Contracts Act § 28(2).4 |
| Retention period (as a source document) | 7 years from the end of the financial year | Accounting Act § 12 |
If your work schedules and attendance records are treated as a source accounting document — which is standard in a payroll context — you have to keep them for seven years under the Accounting Act § 12. That clock starts at the end of the financial year when the underlying transaction was recorded, not from when the record applied. This is the number your payroll administrator needs most, distinct from the three-year statute of limitations on wage claims. Documents have to stay machine-readable and legible for the entire retention period.
Next step: compare your current archiving policy against seven years, not three, and check today whether your system can actually keep the data retrievable that long.
What are the penalties for violating working time requirements?
Violating working time requirements is a misdemeanour, punishable by a fine of up to 300 fine units for an individual and up to 32,000 euros for a legal entity. These penalties sit in Employment Contracts Act §§ 121–127, within the broader misdemeanour chapter §§ 117–129.
| Violation | Individual | Legal entity | Basis |
|---|---|---|---|
| Applying averaged working time to a minor beyond the limit | up to 300 fine units | up to €32,000 | Employment Contracts Act § 121 |
| Breaching the § 46 working time limit | up to 300 fine units | up to €32,000 | Employment Contracts Act § 122 |
| Failing to keep separate records (§ 46(5)) | up to 300 fine units | up to €32,000 | Employment Contracts Act § 123 |
| Breaching the night work limit | up to 300 fine units | up to €32,000 | Employment Contracts Act § 125 |
| Failing to provide daily rest | up to 300 fine units | up to €32,000 | Employment Contracts Act § 126 |
| Failing to provide weekly rest | up to 300 fine units | up to €32,000 | Employment Contracts Act § 127 |
The value of a fine unit rose to 8 euros on 1 January 2025 (Penal Code § 47). That pushes the individual cap in the table above well past the older 1,200-euro figure some internal policies still cite. The 32,000-euro cap for a legal entity is set directly as a euro amount and doesn’t change when the fine unit’s value changes.
Next step: if you have an old internal policy that still cites a 1,200-euro fine, update the number — the old reference understates the risk by half.
How does Taito.ai help with attendance tracking?
Taito.ai sets up the attendance record the Employment Contracts Act requires under § 28 — working time, overtime, and on-call time per person — and keeps it maintained automatically. For more on Estonian working time and rest rules, see the Estonia employment law guide.
Sources
Estonian statutes sometimes add a new provision onto an existing section using a superscript number — that’s how you get § 43¹, § 43², and § 43³. These are independent provisions with their own content, not “§ 431” and not a typo. The same numeric range also has ordinary, non-superscript sections — for example § 122, which covers working time limit violations. Every citation above is spelled out, so you won’t need to parse the numbering yourself.
Everything above comes from the Employment Contracts Act (referred to above simply as “the Act”), unless noted otherwise.
- Employment Contracts Act §§ 43, 43², 43³, 44, 45, 46, 47, 48, 50, 51, 52, 53, 28, 2, 121–127
- Accounting Act § 12 — retention of source documents
- Penal Code § 47 — value of a fine unit
- Public Holidays Act § 2 — list of public holidays
- Labour Inspectorate — working time and rest
Where exact wording matters, follow the link and read the statutory text itself.
Disclaimer
Taito.ai does not provide legal, tax or accounting advice. This article is general information about the law as it stood on the date above, not advice on your situation, and it is not a substitute for it. Rates and thresholds change. Check with a qualified adviser before acting on anything here.
