Remuneration is the wage or salary that the parties have agreed on and that is paid by the employer to the employee for working. Thus, remuneration must be included in the employee’s employment contract, but may also be agreed upon in a collective agreement.
The employee’s employment contract states their gross remuneration. However, the net remuneration is transferred to the employee’s bank account. Net remuneration is gross remuneration minus taxes (income tax, mandatory funded pension, and unemployment insurance payments). The net remuneration, i.e. the amount received by the employee, can be calculated using the Salary/Wage and Tax Calculator.
Remuneration must be paid at least once a month and, unless there is a specific agreement to pay remuneration in cash, the money is transferred to a bank account.
The employee must be ensured minimum wage. In 2025, the minimum hourly rate is EUR 5,31 (gross) and the monthly rate for a full-time employee is EUR 886 (gross). If the employee works in the health sector, is involved in passenger transport activities or in domestic transport of goods, the remuneration is specified in a collective agreement.
The amount of remuneration can only be changed upon agreement. Unilateral changes are permitted only in the event of a temporary reduction in remuneration when no work is provided and in the event of a reduction in remuneration.
Employees must be informed and consulted before any reductions are made. If the employee does not agree to the reduction, they may terminate the employment relationship, after which they will receive compensation as after dismissal by reasons of redundancy.
A reduction in remuneration can be implemented if the employee does not follow the appropriate, clear and timely instructions of the employer regarding work outcomes and is unable to perform work tasks in the agreed manner or volume.
More information on remuneration can be found on the work-life portal Tööelu.