Changes in law 2024

Minimum wage

From January 1, 2024 the minimum wage increases to 820 euros per month (in 2023 it was 725 euros, in 2022 654 euros).

Social tax minimum

The minimum social tax in 2024 is 239.25 euros (33 % of the 2022 minimum wage, i.e. 654 x 0.33). This is the amount to be paid monthly for a contracted employee, and for any other contract it is the minimum amount to be paid to get valid EHIF insurance.

Basic exemption of income tax

In 2024, the general rate of tax-free income remains at 654 euros per month, as it was in 2023. The formula therefore remains the same: 654–654/900 × (payout–1200).

Change in the VAT rate

From January 1, 2024, the standard rate of VAT in Estonia is 22% instead of the current 20%.

Special provisions related to the change in the VAT rate

If the goods or services to be transferred are taxed at a standard rate, the user of cash-based VAT accounting may still until December 31, 2025 pay VAT on the turnover of the goods or services occurred after December 31, 2023 at a rate of 20%, if an invoice was issued to the buyer and the goods were sent or made available or the service was provided before January 1, 2024.

Another transitional provision concerns transactions related to long-term contracts, which are primarily transactions related to real estate. Until December 31, 2025, the taxable person still has the right, on the basis of a written agreement concluded before May 1, 2023, to apply the 20% VAT rate to the transfer of taxable goods or the provision of services, if the relevant agreement provides that the price for goods or services includes VAT, or a 20% VAT rate is added to the price, and the contract does not provide any option for price change resulting from a possible change in the VAT rate.

Various examples of taxation related to the VAT rate change are available atEMTA’s website

Opportunity to change the rate of contribution to the funded pension

From January 1, 2024, persons who have joined the II pillar of the funded pension have the opportunity to increase their funded pension contribution rate from 2% to 4% or 6%. To apply the change, a corresponding application must be submitted to the keeper of the pension register or the account administrator within the period Jan1, 2024 to Nov 30, 2024. The new rate will apply from Jnauary 1, 2025. If a person has several employers, the new rate will be applied at all employers. The state’s contribution, 4%, will not change.