On the 28th of November the Government of the Republic of Estonia decided to raise the minimum wage for 2014 and 2015. The Government also confirmed the unemployment insurance tax rate for 2014 at the current level.

From January 1st 2014 the minimum wage is 2.13 Euros per hour and 355 Euros per month full time. From 2015 the minimum monthly wage is 390 Euros and 2.34 Euros per hour.
Raising the minimum wage also increases the benefits tied to it, such as parental benefits, unemployment compensation and the daily pay for parental leave.

The Government ratified the minimum wage based on an agreement made between the Estonian Trade Union Confederation and the Estonian Employers’ Confederation. The Confederations agreed on September 19th 2013 that the minimum wage will rise by 35 Euros both next year and the year after. In the current year the minimum wage has been 320 Euros according to the Government’s decision on January 10th approving the previous similar agreement made on December 21st 2012.

The minimum wage is mandatory for all employers and employees active in the Republic of Estonia. Companies should take this into consideration when creating their budgets. The minimum wage requirement also applies to board members’ pay for those board members working full time.

In addition the Government decided to leave the unemployment insurance tax rates at the current levels – 2% for the insured and 1% for the employer.

The 2014 state budget also foresees paying the minimum social tax payment from a monthly amount of 320 Euros instead of the current 290. This equals to a minimum social tax payment of 105.6 euros for every full or part time employee.

For advice on accounting and tax issues please contact the accountants at 1Office Estonia by phone on +372 631 1118 or by email at info@1office.ee. Also read about our accounting services and prices here.

1Office Estonia belongs to the 1Office Group, which is active in Estonia, Finland and Sweden. 1Office Group business centres offer accounting services, office spaces, virtual office and legal services.