The government on Thursday endorsed 2.54 euros per hour and 430 euros per month for full-time employees as the minimum wage for 2016 and respectively 2.78 euros and 470 euros for 2017.
The minimum rates of pay for 2016 and 2017 were agreed between the Estonian Employers Confederation and the Estonian Trade Union Confederation (EAKL) on Oct. 28.
The signing of the agreement was preceded by long negotiations and the agreement was reached through mediation by acting public conciliator Henn Parn.
According to the Tax and Customs Board there were roughly 15,800 full-time employees in Estonia getting the national minimum wage in the second quarter of 2015.
The Ministry of Finance has estimated the number of people directly influenced by the increase in minimum wage to be approximately 50,000. The bigger number mainly represents people who are paid more than the currently valid minimum wage but less than the new minimum rate of pay.
Raising the minimum pay from 390 euros to 430 euros a month will bring 8.6 million euros of extra money into the state budget. Revenue of the state will grow by 15.2 million euros and expenditures of the state by 5.6 million euros. In addition one million euros will be deducted from receipts of social tax and transferred to pension funds.
Compared with the 2016 state budget adopted by the parliament, which reckons with a rise in minim pay equal to the rise in average pay, the increase in the minimum wage to 430 euros a month will bring 2.7 million euros more money into state coffers.
The rise from 390 euros to 470 euros a month will bring 15.7 million euros of extra money into the state budget. Revenue of the state will grow by 42.7 million euros and expenditures of the state by 23.3 million euros. In addition 3.7 million euros will be deducted from receipts of social tax for transfer to pension funds.
Source: Baltic News Service
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