According to the agreement, the minimum wage will rise from its current level of 39 percent, to 42.5 percent of the mean wage next year, 45 percent in 2025, 47.5 percent in 2026 and then 50 percent in 2027, union leader Jaan-Hendrik Toomel told ERR.

The coalition agreement included the aim of raising the minimum wage to 60 percent of the median by 2027, which was one of the Social Democratic Party's key electoral pledges. As a result of the negotiations, the aim of making the minimum wage equal to 60 percent of the median wage by 2027 was replaced with a move toward it becoming 50 percent of the mean wage in the country.

Negotiations to introduce a gradual increase to the minimum wage in Estonia started on May 10.

The precise level of the minimum wage is agreed upon each fall by the Estonian Employers'  Confederation (Eesti Tööandjate Keskliit) and the Estonian Trade Union Confederation (Eesti Ametiühingute Keskliit). The decision is based on the most recent economic forecasts, including the current business environment and outlook, as well as the latest labor market developments.

This year's monthly minimum wage for full time employment in Estonia is €725. The minimum hourly rate is €4.30.

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