The government is expected to adopt a bill on Thursday according to which as of Jan. 1, 2018 minimum pay is raised to €500 a month, and the minimum hourly wage will be raised to €2.97.
The agreement on the minimum wage was signed by the Estonian Employers' Confederation as well as the Estonian Trade Union Confederation (EAKL) on Oct. 26 this year. The minimum wage agreement in essence is an expanded collective pay agreement on the highest level, which means that it has to be respected by all of Estonia's employers.
In effect, starting Jan. 1, a full-time employee can't be paid a monthly wage of less than €500.
The minimum wage in 2017 is €470 a month, of which a minimum wage earner will receive €398.46 euros as take-home pay. Starting 2018 both the basic income tax exemption for low and middle income workers as well as the minimum wage will be raised to €500, which means that the net income of minimum wage earners will increase by 21.1 percent or €84 to €482 a month.
Raising the minimum monthly salary from €470 to €500 is expected to result in additional state revenue of some €5.2 million in the form of social tax and unemployment insurance premiums.
Editor: Dario Cavegn