Estonia: Employee Perks: Customary Benefits and Perks in Estonia

Article provided by MAI-CEE, Asinta’s Partner in Estonia.

The number one employee benefit Estonians care about is health insurance. This is supplementary to the national healthcare service which can be subject to long waiting lists. All employer sponsored benefits are considered taxable income for employees. Beginning in 2018, employers can expend 400€ worth of benefits every year on a pretax basis for every employee. Every employee must be on the insurance policy for the employer to receive any tax benefit.

There are not many perks Estonian employers offer. Western and financial/technical companies are usually more generous. More traditional and local companies generally have an understanding that ‘salary is your benefit.’ The following perks some employers offer:

• Additional vacation days – Typical holiday allowance is 28 days of paid holiday (mandatory by law). In the public sector its typically 30-35 days. Any extra days would be considered a perk. Many companies offer extra days in the form or collective holidays, when all the staff is away from the office and business is virtually closed down. During Christmas and summers for example.
• Company cars – These are typically offered to sales people and senior executives are offered for business and private use, but this is taxed. Reimbursement for use of personal cars is also a practice employers use, and the reimbursement runs about 0.30€ per kilometer (tax-free), but not more than 335 euros per month. If the reimbursement is more than 335€, the overpaid part is taxed.
• Gym memberships – Supporting employees’ health has always been popular. Perks can range from small things such as fruit in the office, but large proportion of employers also pay for gym memberships and supports employees who want to compete in athletic events such as marathons.
• Health insurance– This is now offered by 3 insurers and 400€ per year per employee is not taxed by fringe benefits tax, there are debates whether this line will ever be popular since the state healthcare is good – but we will see after statistics come in summer. Health insurance usually covers in- and outpatient treatments, vision and dental care. Massage and / or rehabilitation limits are also available, as well as some other extras.
• Telecommuting – It’s very popular to let employees work from home, especially employees that use a phone and laptop for their work.
• Personal Accident Insurance – This perk is getting more popular from our point of view. It usually covers death, disability and traumas. It’s quite a cheap product as well.