Hiring Employees From Estonia | Hiring Non-Estonian Employees (EEA or Swiss Tax Resident) | Recurrent independent Contractor (Any country Tax Resident) | |
---|---|---|---|
Employment | Full-time | Full-time | Recurrent contactor |
Payouts | Based on employment contract | Based on employment contract | Based on a Service Agreement |
Payout process | HR specialist checks onset of conditions regulated by a contract, counts payroll and net payment, and completes payment later | HR specialist checks onset of conditions regulated by a contract, counts payroll and net payment, and completes payment later | Contractor issues and sends an invoice to the company, a company checks whether services are completed and proceeds to the payment |
Pros | No permits, contribution to social security, physical presence in Estonia | No permits, no tax liabilities in Estonia | No permits, reduces overhead, legal flexibility |
Cons | Tax liabilities in Estonia, absolute regularization | Potential tax liabilities in a county of residence, regularization in that country | Risk of misclassification, increased scrutiny |
Employer Contributions | 33% + 0.8% | Depends on jurisdiction | 0% |
Employee Contributions | 20% + 1.6% + 2% | Personal tax in a country of tax residence | Tax in a country of tax residence |
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