Lithuania – Updates To Minimum Wage, Non-Taxable Amount and SODRA Rate

The Lithuanian parliament has approved  the draft Law No XIVP-4225, draft state budget for 2025 and  the State Social Insurance Fund Budget for 2025. These laws amends the Personal Income Tax Law and social security contributions. The changes are effective from 1 January 2025.

Below is the summary of the changes:

Changes in the Average Monthly Salary

The draft State Social Insurance Fund Budget for 2025 sets the average monthly salary (VDU) amount at EUR 2,108.88.

The VDU is used in the basis cap for employee contributions to SODRA and threshold for the upper personal income tax rate.

Change in monthly minimum wage

The draft state budget for 2025 increases the monthly minimum wage to EUR 1,038. The monthly minimum wage is used in the NTA calculation and by SODRA to calculate minimum employer contributions.

Changes in non-taxable amount

The draft Law No XIVP-422 and draft state budget amends the non-taxable amount (NTA) calculation as follows:

The monthly GMP is amended from EUR 2,167 to EUR 2,387.29. GMP is used to determine NTA calculation for employee’s earning above the minimum wage. Where an employee earns above the minimum wage, NTA is calculated as follows:

• Employees earning below EUR 2,387.29, NTA = EUR 747 – 0.49* x (monthly earnings – EUR 1,038)
• Employees earning above EUR 2,387.29, NTA =EUR 400 – 0.18 x (monthly earnings – EUR 642)

*Decrease from 0.50

• NTA for employees earning minimum wage remains unchanged at EUR 747
• NTA remains unchanged at EUR 1,127 and EUR 1,057 for employees who are incapacitated to work from 0-25% and 20-35% respectively.

Changes in social insurance contribution rates for accidents at work and occupational diseases

Group II contribution rate is reduced from 0.46 to 0.43 percent.

Note: The above changes have not been approved by the Lithuanian Government . Once it is approved it will be effective from January 2025.

Please contact your Mercans’ services delivery team for any additional information regarding the implications of the above change.

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Lithuania – Updates To Minimum Wage, Non-Taxable Amount and SODRA Rate

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