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Wage subsidy


Lisatud 22.04.2016 | Uuendatud 14.09.2021

Wage subsidies can be granted to employers who employ an unemployed person.

In addition to other cases, an employer may also apply for a wage subsidy if they employ a person with decreased working ability and

  • who has been registered as unemployed for at least six consecutive months;
  • was released from prison up to 12 months prior to registration as unemployed, regardless of their unemployment status period;

  • has been registered as unemployed for at least 12 months in the last 15 months and whose unemployment status has meanwhile been cancelled due to employment (Labour Market Services and Benefits Act § 6 section 5 cl 3) or compulsory military service, alternative service or reserve service (LMSBA § 6 section 5 cl 7) – also applies to registered unemployed persons aged 16-24 or

  • worked under protected employment conditions immediately before entering the open labour market. You can find further information on protected employment here: Protected employment.

A wage subsidy is paid for 12 months. In the case of a fixed-term contract which lasts for at least six months, the wage subsidy is paid during a period that is equal to half the duration of the employment relationship, with a maximum of 12 months. Wage subsidies are calculated as 50% of the wage or salary, which cannot exceed the official minimum wage (584 euros per month in 2020).

Legal and natural persons or an institution of a local authority unit may apply for wage subsidies. State institutions and legal persons in public law cannot apply for wage subsidies.

Wage subsidy shall not be paid if an unemployed person is a member of the management or supervisory board of the enterprise that employs the unemployed, a partner in a general or limited partnership or if the unemployed person owns more than 50 per cent of that company.

If anything other than an employment contract (e.g. an authorisation agreement or contract for services) is entered into with the employee, wage subsides will not be paid.

Please submit wage subsidy application at least 7 working days prior to the commencement of work. If employment commences before the wage subsidy contract is entered into, your application will be rejected. 

The wage subsidy for people with decreased working ability is co-financed by the European Social Fund. The programm will be finished by the end of year 2022. We will pay subsidy for salary declarations submitted until the end of 2022.

A more detailed description of applying for and the payment of wage subsidies is available here: Wage subsidy.

The labour market service provided for individuals with decreased working ability is co-financed by the European Social Fund of the European Union by regulation No. 57 of the Minister of Health and Labour of 27 March 2015 on the basis of  ‘Provision of labour market services for the target group of work reforms.

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