--- title: Taxation of sick leave compensation date: 2016-07-01T10:15:35Z modified: 2016-07-01T10:15:35Z permalink: "https://grow.ee/haiguspaevade-huvitamise-maksutamine/" type: post status: publish excerpt: "" wpid: 4296 timestamp: 2016-07-01T10:15:35Z tags: - Taxes - sick leave compensation --- The taxation of sick leave compensation in terms of payments made by the employer has remained confusing for many. We are adding some clarifying explanations. The employer must pay the employee a compensation of 70% of the average salary for the 4th to 8th sick day. The compensation is taxed only with income tax. Social, funded pension and unemployment insurance contributions are not paid from this compensation. To clarify the law: [Occupational Health and Safety Act (OTSA) § 122](https://www.riigiteataja.ee/akt/ttos#para12b2) at the same time allows the employer to pay compensation up to 100% of the average salary. Therefore, the payment of sickness benefit in the amount of the average salary is also taxed only with income tax. The same benefits also apply to members of the management board or members of the management body replacing it. The benefits granted to persons employed under other agency and employment contracts do not extend. You can read more [here](http://www.rmp.ee/toooigus/tls/tooandja-mastava-haigushuvitise-maksustamiseb-ja-deklareerimiest-2016-06-15?Print=1&popUp=1).