Law Changes 2024

Minimum wage

From 01.01.2024, the minimum wage increases to EUR 820 per month (EUR 725 in 2023, EUR 654 in 2022).

Social tax minimum

The social tax minimum in 2024 is EUR 239.25 (33% of the previous year's minimum wage, i.e., EUR 654 × 33%). This is the amount that must be paid monthly for employees under employment contracts, and for other contracts, it is the minimum amount that must be paid for the employee to have valid health insurance.

Tax-free income threshold

In 2024, the general tax-free income threshold remains the same as in 2023 - EUR 654 per month. The formula therefore remains the same as in 2023: 654 – 654 / 900 × (payment – 1200).

VAT rate change

From 01.01.2024, Estonia's standard VAT rate is 22% instead of the previous 20%.

Special provisions related to VAT rate change

If goods or services are taxed at the standard rate, a cash-basis VAT accounting user may still pay VAT at the 20% rate until June 30, 2025, on turnover arising after December 31, 2023, if the invoice was issued and the goods were dispatched or made available, or the service was provided before January 1, 2024.

The second transitional provision concerns long-term contracts. Taxable persons have the right until June 30, 2025, to apply the 20% VAT rate in effect until December 31, 2023, to goods or services based on written contracts concluded before May 1, 2023.

Various examples can also be read on the EMTA website

Option to change funded pension contribution rate

From 01.01.2024, individuals who have joined the II pillar can increase their funded pension contribution rate, paying 4% or 6% instead of 2%. To make changes, a corresponding application must be submitted to the pension register administrator or account manager between 01.01.2024 and 30.11.2024. The new rate will take effect from 01.01.2025. If the employee has multiple employers, the new rate applies to all employers. The state's contribution of 4% does not change.