The minimum wage in Estonia is set to rise by €95 in 2024, to €820 per month gross.
Following an agreement struck in October between employers, represented by the Estonian Employers' Confederation (Eesti Tööandjate Keskliit) and employees, represented by the Estonian Trade Union Confederation (Eesti Ametiühingute Keskliit), the government confirmed the 2024 minimum wage on Thursday.
The minimum hourly wage in 2024 is set to be €4.86.
Minister of Economy and Information Technology Tiit Riisalo (Eesti 200) said of the development that: "The ongoing rise in consumer prices affects the livelihoods of lower-waged workers the most."
"As a society, we need to help those who are having the most difficulties which is what raising the minimum wage will do," Minister Riisalo went on.
"On the other hand, the ever-increasing wage-price pressure on our entrepreneurs must also be taken into account. I recognize and thank our social partners – ie. the employers and trade unions – whose agreement resulted in this rise in the minimum wage," Riisalo continued, via a Ministry of Economic Affairs and Communications press release.
Minister Riisalo added that according to the goodwill agreement signed with the social partners in spring, the goal is that the minimum wage will be 50 percent of the average wage in Estonia by 2027. In 2024, as a way-marker, this percentage will stand at 42.5 percent.
The Ministry of Finance, the increase in the minimum wage rate by €95, a 13.1 percent increase on 2023's figure, will bring €23 million in additional tax revenues to the state budget.
An increase in the minimum wage leads to a concomitant rise in wages and salaries relating to this minimum wage, both in the private and the public sectors.
Benefits linked to the minimum wage, such as parental benefits, will also rise.
MTA: Minimum wage-earners made up 3.4 percent of all full-time workers
The Tax and Customs Board (MTA) says that in 2023, there have been 16,700 full-time working people earning the minimum wage (€725 per month this year) as a nine-month average, making up 3.4 percent of all full-time employees.
In addition, an average of 21,100 full-time workers earned wages between €726 and €819 gross per month (ie. up to next year's minimum wage figure) at total of 4.3 percent of the workforce.
A rise in the national minimum wage may lead to an increase in subsidies and benefits payable by local governments, but also affect the prices of services offered, such as the fee for a place in a kindergarten, if the local government has linked them to the minimum wage.
In addition, the increase in the minimum wage will contribute to improving the livelihoods of the poor
This year's minimum wage as noted was €725 gross per month; in 2022 it stood at €654 and in 2021 at €584 (unchanged on 2020's figure).
Editor: Andrew Whyte, Mait Ots