Taxation of a Part-Time Employee

The taxation of part-time employees in Estonia follows the same principles as for full-time employees, but calculated proportionally on a smaller salary. This means the employer's obligations are the same — only the amounts payable are smaller. The employer must pay social tax (33%) and unemployment insurance contributions (employer's share 0.8%) on the part-time employee's salary, and must withhold the employee's income tax and unemployment insurance contribution (1.6%). All these taxes are declared monthly in the TSD declaration. It is important to know that the income tax-free minimum for a part-time employee is the same as for a full-time employee, but it is applied proportionally. The employee can declare to their employer that they wish to use the tax-free minimum, but if the employee has multiple jobs, they must ensure that the total does not exceed the permitted limit. Payroll records must reflect all actual hours worked and salary paid. We recommend using a digital payroll system that automatically calculates taxes and generates the necessary declarations. A professional accountant helps ensure that all obligations are met correctly.