Looking back at the last few years, salary growth was 7.3% in 2016, slowed to 6.5% in 2017 and was back at 7.3% last year, Statistics Estonia said in its Friday press release.

The year-on-year increase was slowest in the second quarter with 6.4%, speeding up again towards the end of the year. The growth of real wages, which take into account the change in the consumer price index (CPI) as well, was slower than that of monthly gross wages and salaries due to rapidly rising consumer prices, reaching 3.7% compared to 3% in 2017.

Compared to 2017, irregular bonuses and premiums paid out in 2018 increased by 25% per employee on average. Without taking this into account, wages and salaries grew by 6.5% last year, which means that irregular bonuses and premiums affected the year-on-year increase by 0.8 percentage points.

ITC, financial and insurance services paid highest salaries

As in previous years, the two sectors paying the highest salaries were information technology and communications (ITC) at €2,172 and financial and insurance services at €2,154 gross pay on average.

The lowest salaries were paid in accommodation and food services as well as other service activities, Statistics Estonia wrote.

Notable leaps were recorded in education (13.1%), wholesale and retail trade (10.8%) and water supply, sewage, waste management and remediation activities (10.2%), while the annual average monthly gross wages and salaries increased across all economic activities. The lowest year-on-year increase was recorded for administrative and support service activities at 1.2%.

Statistics Estonia cautioned that another year-on-year leap, namely in the other service activities category, was due to a change in statistical methodology, according to which non-profit organisations with fewer than 50 employees are now included as well.

Salaries grow faster in public than in private sector

In the public sector, including state and municipal institutions and enterprises, the average monthly gross wages and salaries reached €1,393, which is a year-on-year increase of 10.1%.

In comparison, salary growth in the private sector was slower at 6.4%, with the average salary rising to €1,283.

Looking at average salaries by county, Harju County still fared better than everyone else with €1,455 a month, followed by Tartu County's €1,289. The lowest average is reported for Hiiu County at €944 a month, though all counties did better than in 2017.

The number of employees converted into full-time units increased by 5%, with the most notable change seen in other service activities, arts, entertainment and recreation activities as well as in real estate activities, although again this is mainly due to Statistics Estonia's new methodology that now also includes non-profit organisations with fewer than 50 employees in the wages and salaries survey.

In 2018 the average monthly labour cost per employee was €1,756 and the hourly labour cost €11.61. Compared to 2017, this means that the average monthly labour costs per employee increased by 6.6%.