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HomeEstoniaEstonian chamber proposes EUR 250 as tax-free limit of employee's health expenses

Estonian chamber proposes EUR 250 as tax-free limit of employee’s health expenses

The Estonian Chamber of Commerce and Industry has once again turned to the Ministry of Finance and the Ministry of Social Affairs with a proposal to increase the tax-free limit of expenses for employee health promotion from the current 100 euros to 250 euros per quarter, which is approximately 83 euros per month and 1,000 euros per year per employee.

First of all, the increase in the tax-free limit is necessary because, as a result of the rapid inflation of recent years, the purchasing power of 100 euros has decreased and this will continue in the coming years. Compared to the time when the limit came into effect, the consumer price index has increased by nearly 45 percent, the chamber said.

The current bottleneck is also the fact that the employer is only allowed to reimburse a very small part of the employee’s health promotion expenses tax-free. The chamber proposed to supplement the list of tax-free expenses for health promotion. For example, the addition of expenses related to health services, such as vaccinations or paid health examinations, as well as massage services to this list could be considered. The implementation of the proposal will give employers wider opportunities than today to support the promotion of employees’ health, including the prevention and mitigation of both mental and physical health problems.

“We have received feedback from both employers and employees that employers are ready to offer the possibility of reimbursement for expenses related to health promotion, but employees do not use it, because the current list of tax-free expenses is very limited. Thus, the narrow list of tax-free expenses is one of the reasons why this option is not used more by both employers and employees today,” Mait Palts, director general of the Chamber of Commerce and Industry, said.

According to the chamber, the current list of tax-free expenses does not sufficiently take into account that employees of different ages and interests need and want different activities to promote their health.

The chamber added that, taking the proposal into account would have a longer-term positive effect on public health. If employers invest more in the health of employees than before, the health of employees will likely improve in general, and as a result, the state’s spending on health and social care will decrease. Therefore, according to the chamber, this proposal is a very cost-effective solution for promoting people’s health, which does not involve additional costs to the state budget.

Source: BNS

(Reproduction of BNS information in mass media and other websites without written consent of BNS is prohibited.)

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