New regional bus contracts set sharp pay rise for drivers

New contracts for regional bus routes will require operators to pay drivers Estonia’s average wage, bringing a sharp increase in pay and raising the need for state subsidies, ERR reported.

The Estonian Road Transport Association and the Transport Workers’ Union agreed in 2025 that bus drivers should be paid the national average wage. Regional route contracts run for eight years, and public transport centres are beginning to launch the first tenders under the new terms this year.

“All contracts will be renewed over the next five years,” said Andrus Nilisk, executive director of the North Estonia Public Transport Centre. Some contracts have already been renewed or are being processed, while two more are due to be renewed next year, followed by two each year until 2031.

The calculation would be based on last year’s average wage, or about 2,100 euros. Drivers working under existing contracts earn about 1,500 euros this year. Their pay will rise through indexation, with older contracts providing an increase of about 100 euros annually, Nilisk said. Under the new contracts, however, the increase will be abrupt.

The pay rise would also increase the annual state subsidy for public transport. Kersten Kattai, director of the Estonian Road Transport Association, said labour costs account for about half of the price per route kilometre. The additional subsidy needed during the transition period would be about 1.5 million euros a year.

Teachers’ minimum salary is 1,970 euros this year, while Estonia’s median wage has been 1,750 euros. Minister Hendrik Johannes Terras said the new pay requirement could affect bids for route-kilometre prices, but he did not expect it to affect next year’s budget significantly because relatively few contracts will be renewed.