The Central Bank of Estonia published an analysis of labour market data showing that headline average wage growth accelerated to 6.2% in the first quarter from 4.5% in the previous quarter, but the increase was largely driven by timing distortions linked to 2025 and 2026 income tax changes that shifted when employers paid wages. Excluding those outlying months, wage growth slowed to 5.3% in February and March from 6.3% in October and November. The slowdown was reinforced by the postponement of the 2026 minimum wage increase until April, which held back lower-paid sectors including accommodation and catering, administration and support activities, and other service activities. Second-quarter wage growth will be higher than in February and March because the minimum wage is 6.8% higher and the minimum hourly wage in healthcare is 5% higher. Over the longer term, average wage growth is expected to remain below but close to 5%. Separate survey data from Statistics Estonia showed the unemployment rate rose to 7.1% in the first quarter from 6.4%, largely because unemployment is usually higher at the start of the year. At the same time, data from Töötukassa show registered unemployment has been falling for more than two years and vacancies started to rise last year, indicating that competition for available jobs remains tight but is easing.
Central Bank of Estonia2026-06-02
Central Bank of Estonia reports first quarter wage growth rose to 6.2 percent on tax timing effects while unemployment increased to 7.1 percent
The Central Bank of Estonia reported headline average wage growth of 6.2% in the first quarter, but underlying wage growth slowed to around 5.3% once timing effects from 2025–2026 income tax changes and the delayed 2026 minimum wage increase are excluded. It expects second-quarter wage growth to pick up due to higher minimum wages, while average wage growth should remain close to 5% over the longer term. Statistics Estonia data show the unemployment rate rose to 7.1% in the first quarter, although Töötukassa figures indicate registered unemployment has been falling and job vacancies rising, pointing to still tight but easing labour market conditions.