I moved to Tallinn, the capital city of Estonia, a few years ago for work. My decision to relocate to this relatively new nation in Northern Europe came out of curiosity and willpower to venture far and beyond. And my next destination was Estonia. As usual, I took up the task to find out more about this Baltic country and came up with surprising findings regarding the average salary for an expat, average household income, minimum wage across the country, and cost of living, especially in the capital city, Tallinn. Due to high economic freedom in this country, I thought it is a great place to live, work, or even do business there. Here is what I found out about the average income for those working in Estonia.
So, what is the average salary in Estonia? Before I give you a comprehensive answer to this question, let me start with the current minimum wage, especially when working in Tallinn. On the lowest side, a worker takes home about €540 per month, which translates to approximately $610. Much to my surprise, I discovered that this amount is indeed the national minimum salary in Estonia. Compared to other Baltic states, this figure is relatively higher. However, the average net wage in this country is approximately €950 per month.
But here is an interesting observation: Despite the relatively low minimum salary, Estonia’s economy is thriving. Besides, the working conditions are flexible compared to other countries across the world. In Estonia, we work 9 hours per day and five days a week. But the working conditions depend solely on the sector. That’s several companies are stricter when it comes to working hours while some allow their workers to decide the most appropriate time of working. In other words, companies here apply a work culture based mainly on merit. It means they emphasize on getting the work done rather than wasting time sitting in offices.
What is the Average Salary in Estonia?
As I had stated earlier, the average monthly income in Tallinn, the capital city, is€ 950 per month. But this figure does not represent the entire nation. Looking at 2019’s Statics Estonia, the average monthly income is €1291.
Back to the 1st quarter of 2018, Estonia’s average monthly gross salaries and wages were the highest in the energetics and information technology as well as insurance and financial activities. For instance, a software team leader earned as much as €3662 monthly gross salary.
When it comes to individual cities, the situation changes drastically. Within the 1st quarter of 2018, we witnessed different salaries in different counties. The average salaries and wages were recorded highest in Harju County at €1386 and €1209 in Tartu County. The lowest salaries were experienced in Hiiu (at € 896) and Saare (at €930).
In 2019, things were different. At least there was an increase in wages and salaries at the start of the 2nd quarter. The salaries increased from €1309 per month from the 1st quarter to €1419 in the 2nd quarter of 2019. Compared to€ 596.77 wages in 1991, we can conclude that there has been a steady increase in average salaries as the county economy improved.
Salaries in Estonia are benchmarked with the average monthly earnings. At the moment, the fixed minimum wage stands at €500 monthly and 2.9-3 cents per hour.
As an experienced expat, I have noted that Estonia is a beautiful place to live and work because there is some element of tolerance, especially to foreign workers. Estonia has considerations when it comes to working hours, especially during the night and dangerous working conditions. In addition to that, there is a part-time work which goes hand in hand with partial wages.
Just like in some countries, there are pitfalls: there is a difference of up to 25% between men’s salary and women’s salary. Of course, women earn less than men despite holding the same positions in a given sector.
Workers and international students with no experience are subjected to minimum wages in Estonia. On average, skilled and experienced employees can earn an average of €1200, although the income varies according to the city where someone is working.
In the capital city, Tallinn, the income can start from €2000 per month (according to one’s experience) while in a smaller town, away from major cities, employees can take home between €700 and €1200 depending on their experience and positions.
Below is a list of highly paid professionals in Estonia and their average monthly salaries in Euros:
- • Information Technology Specialist- €2000
- • Dentist-€1600
- • Doctor-€1600
- • Lawyer-€1400
- • Engineer-€1300
- • Welder-€1100
- • Driver-€900
- • Medical Assistant-€900
- • Nurse-€900
- • Teacher-€900
- • Electrician-€900
- • Seller-€700
- • Waiter-€700
- • Hardyman-€700
- • Seasonal Workers-€700
Estonia enjoys the lowest unemployment rate compared with the rest of the Baltic countries. At the beginning of 2019, the unemployment rate stood at 8%, which is considered among the lowest in the region.
Average household income in Estonia
Due to strong economic growth in Estonia, household income has improved tremendously. Compared to other Baltic nations, a higher number of households in Estonia receive an average salary compared to the Western countries.
According to the Organization of Economic Cooperation and Development (OECD) index, most of the households in this country earn an average salary of $18,665 per year. This figure represents the available income that each family spends on basic needs such as food, transportation, mortgages, insurance, health, and many more. Compared to her neighbouring countries like Lithuania and Latvia, Estonia’s middle-class household income has grown exponentially in recent years.
Minimum Wage in Estonia
Estonia raised the national minimum salary in January 2019. The amount was increased to a fixed salary of €540 per month. This means the lowest-paid employee in Estonia should earn a minimum wage of €6,480 in a whole year. This figure represents gross salary before taxation.
Also, the minimum salary is for full-time workers. According to the Estonian labour contract act of 2009, every full-time employee is entitled to work for €40 hours per week or 8 hours a day.
The government is strict about the monthly minimum wage, and it emphasizes that no employee should receive anything less than the government-mandated minimum salary. Failure to meet this requirement by employers amounts to punishment.
Accordingly, the minimum salary has been increased by € 40 a month from the previous year. This increase is about 8%, and it’s more than the Consumer Price Index (CPI) in Estonia as per 2018. As a result, workers have a buying power, unlike living on credit in the previous years.
The national ranking of minimum wage places Estonia at position 27 out of 97 on the list of countries that are growing economically. Usually, the National Minimum Wage (or NMW) of a given country is the minimum or lowest salary per month, per day, or hour that employers are supposed to pay their employees. That is why Estonia raises the minimum wage by a certain percentage to ensure that workers are well paid.
Average Salary in Tallinn
Tallinn is the capital city of Estonia and an important economic hub for the country. Therefore, the average wages in this capital city is higher than the national minimum salary across the country. As a matter of fact, wages and salaries are higher than in other parts of the country.
As I had mentioned earlier, the average wage in Estonia is estimated to be € 950 per month (net salary). But it varies depending on the profession and company. For example, a qualified IT expat can earn more than the average wage. So, the average monthly income in Tallinn is € 1291 per month starting January 2019.
Even if the average salary for a full-time worker is reasonable in Tallinn compared to other towns, there are some considerations to make before moving to this city to work. For that reason, it is essential to predict the living expenses in the city before setting your foot there. For example, an average house rent ranges between €300 and €500 per month. Food costs are not less than € 200 let alone other expenses. At the end of the month, you can end up saving at least €200.
Cost of Living in Estonia
The cost of living in Estonia varies from one place to another. When I compare Tallinn, the capital city, with other cities in the world, I find that it has a cost of living index approximated at 52.83. This makes Tallinn less expensive compared to major cities in Europe and other parts of the world.
Rent in Tallinn is three times cheaper than in a city such as Amsterdam. Also, it is eight times more affordable compared to San Francisco. It is quite impressive, especially for expatriates coming to settle in Estonia. There is free public healthcare-whereby the government pays health insurance for nearly 95 of the population-and free transport within the capital city. At the end of the month, I can save on transportation or healthcare. And use the money for other expenses such as entertainment, buying credit for my phone, and so on.
What about property prices? A one-bedroom apartment in Tallinn starts from $600 while the same house goes for $400 outside the city centre. Buying an apartment is a good idea because you will avoid paying rent, but it’s somehow costly. The price per square foot for the apartment within the city centre starts from $300. When it comes to the mortgage, the interest rate per year for 20 years is 2.49 %. Depending on your income, you will find life in Estonia to be enjoyable and stress-free.
With these tips, you should be able to have rough estimates on how living in Estonia can be. Depending on your profession, then you can plan out your life in Estonia without stress.
About the author: Marta Kovachek is the author of this article. She graduated from the University of Chicago with a master’s degree in Economics. Marta enjoys writing about the current economic situation and loves helping our readers to find their next "destination". From places to live to complex social and economic topics, we always enjoy Marta's work. Please contact us in case of any questions.