The Chamber Proposed to Increase the Tax-Free Limit for Employee Health Expenses to 250 Euros

The Estonian Chamber of Commerce and Industry (ECCI) once again approached the Ministry of Finance and the Ministry of Social Affairs with a proposal to raise the tax-free limit for employee health promotion expenses from the current 100 euros to 250 euros per quarter, which is approximately 83 euros per month and 1000 euros per year per employee.

Firstly, the increase in the tax-free limit is necessary because the purchasing power of 100 euros has decreased due to rapid inflation in recent years, and this trend will continue in the coming years. Since the limit's introduction, the consumer price index has risen by nearly 45 percent.

A current bottleneck is that employers are only allowed to reimburse a very small part of the health promotion expenses for employees on a tax-free basis. The Chamber of Commerce proposed to expand the list of tax-free health promotion expenses, for example, considering the inclusion of healthcare expenses such as vaccination-related costs or the costs of paid health screenings, as well as the addition of massage service costs to this list. Implementing the proposal would provide employers with broader opportunities than today to support the promotion of employee health, including the prevention and alleviation of both mental and physical health issues.

"We have received feedback from both employers and employees that employers are ready to offer the opportunity to reimburse health promotion-related expenses, 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 opportunity is not used more today by both employers and employees," said Mait Palts, Director General of the Estonian Chamber of Commerce and Industry. According to the Chamber of Commerce, 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 for their health promotion.

Taking into account the Chamber of Commerce's proposals would result in a longer-term positive impact on public health. If employers invest more in their employees' health, the overall health of the workforce is likely to improve, thereby reducing the state's expenditures in healthcare and social sectors. Therefore, according to the Chamber of Commerce, the proposal is a very cost-effective solution for promoting people's health without incurring additional costs to the state budget.