High-ranking state officials, MPs to see raises next month
On April 1, the salaries of high-ranking public servants, including the president, ministers and MPs, will be changing. The Ministry of Finance is to calculate the relevant index, according to which these salaries will likely increase, by mid-March.
Following last year's April 1 indexation, the monthly salary of the highest-ranking state officials — the president, the president of the Riigikogu, the prime minister and chief justice of the Supreme Court of Estonia — exceeded €6,000 for the first time. For the past year, the monthly salary of these four officials has stood at €6,168, marking the highest indexed salaries of 2019. This will be reflected in the Ministry of Finance's index calculations later this month.
The value for the ministry's index for the highest salary rate will depend 20 percent on the annual growth of the consumer price index (CPI) and 80 percent on the annual growth in receipts of the pension insurance portion of the social tax.
Last year, the index for the highest salary rate stood at 1.084; the year before, at 1.076, indicating salary increases of 8.4 and 7.6 percent, respectively. History has shown that the index typically increases, and the same can be expected this year as well.
If the index increases, the highest salary rate will increase as well, as will the salaries of high-ranking state officials accordingly.
Until 2018, the highest salary rate was fixed at €5,200 under the Salaries of Higher State Servants Act, with only the index changing. As of March 1, 2018, however, the previous year's highest salary rate under indexation is indexed in turn every spring. This marked a significant change, as the highest indexed salary rate used as the basis for indexation last year stood at €5,690, nearly €500 more than the previous static amount of €5,200.
This year's index will be multiplied with the current highest salary rate of €6,168. Should the index remain the same as last year, for example, at 1.08, the monthly salary of the four highest-earning public servants would increase on April 1 to €6,661. This would indicate an annual growth of 8 percent, or about the same as Estonia's average wage growth last year.
High-ranking state officials are in turn divided into seven different groups, and each group has its own set salary coefficient with which the highest salary rate is multiplied. The coefficient for the four highest-ranking public servants is 1. The coefficient for the next group, which includes the vice-presidents of the Riigikogu, the auditor general, the chancellor of justice, the prosecutor general, and all ministers other than the prime minister, is set at 0.85. The coefficient continues to decrease in size with subsequent categories, reaching 0.25 in the last category, which includes members of the supervisory board of the Bank of Estonia.
MPs fall into the fourth category, with a coefficient of 0.65. This means that MPs currently earn a monthly salary of €4,009 (€6,168 x 0.65). Should the highest salary rate reach €6,661, for example, MPs' salaries would increase to €4,330 (€,661 x 0.65) on April 1.
Following indexation, the monthly salary of the president and the other three highest-ranking state officials increased by €478 on April 1; MPs' salaries, meanwhile, increased by €406.
High-ranking public servants' salary coefficients
During the current period (April 1, 2019 - March 31, 2020), the index for the highest salary rate is set at €6,168.31. The salaries of all high-ranking public servants are assigned a coefficient with which the highest salary rate is multiplied.
According to the Salaries of Higher State Servants Act, salary coefficients are as follows:
- president 1.0
- president of the Riigikogu 1.0
- prime minister 1.0
- chief justice of the Supreme Court 1.0
- vice-president of the Riigikogu 0.85
- auditor general 0.85
- chancellor of justice 0.85
- Supreme Court justice 0.85
- prosecutor general 0.85
- minister 0.85
- secretary of state 0.85
- Riigikogu committee chairman, parliamentary group chairman 0.85
- Riigikogu committee deputy chairman, parliamentary group deputy chairman 0.75
- circuit court judge 0.75
- MP 0.65
- county or administrative court judge 0.65
- public conciliator 0.55
- gender equality and equal treatment commissioner 0.55
- Bank of Estonia supervisory board chairman 0.35
- Bank of Estonia supervisory board member 0.25
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Editor: Aili Vahtla