Pursuant to the effective Occupational Health and Safety Act (OCHSA), an employer must pay an employee a benefit of 70 per cent of the employee’s average wages for the fourth until the eighth calendar day, and the benefit is not subject to income tax.

An employer must pay an employee must pay an employee a benefit of 70% of the employee’s average wages in the last six months for the fourth until the eighth calendar day of sickness or injury. The benefit will be paid by the Estonian Health Insurance Fund as of the ninth day of sickness or injury. It is now possible for the employer to also pay the benefit for the second and third day of sickness without it being subject to social tax.

Although § 122 of the Occupational Health and Safety Act only requires the employer to pay 70% of the employee’s average wages to the employee, the employer also has the right to pay the employee a sickness benefit of 100% of the employee’s average wages for the second until the eighth day of sickness, which is only subject to income tax.

Thus, if an employer would like to pay the employee a sickness benefit that is bigger than required and wants it to be subject to income tax only, they can pay a sickness benefit of 100% for the second until the eighth day of sickness.