As a result of the agreement, the minimum wage will increase by 8 percent, amounting to 43 percent of the average salary forecasted by the Bank of Estonia for next year.

"The increase in the minimum wage helps reduce social inequality and poverty among working people. We all want to feel valued and be able to cover our expenses, including those of our families, until the end of the month. However, even with the additional €66, it will still be difficult for some workers to make ends meet," said Kaia Vask, chair of the Trade Union Confederation.

Vask emphasized that, according to the trade unions, wage growth must continue at a faster pace in the coming years to ensure adequate economic security and a decent standard of living for workers.

Hando Sutter, CEO of the Employers' Confederation, highlighted that next year's minimum wage increase will outpace both the projected inflation rate and average wage growth, thereby improving the purchasing power of lower-income earners.

"This decision represents a compromise. While the economy continues to decline, employers in Estonia have raised wages despite shrinking business volumes due to a shortage of workers."

The minimum wage level is negotiated annually in the fall by labor market parties – the Estonian Employers' Confederation and the Estonian Trade Union Confederation – based on the most recent economic forecast from the Bank of Estonia. The agreed-upon minimum wage is then confirmed by the government.

This year, the minimum wage for full-time work stands at €820.

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