The minimum wage is the basis of any payroll-related accounting. Therefore, if you want to keep things in order, you must keep up with all the changes in terms of this important regulation. Here we’ll tell you about the minimum wage in Lithuania as of 2023, and how it changed over time, so you would know what to expect next year.
We will also explain how the amount of minimum wage is related to the payroll tax in Lithuania.
Minimum wage and its changes
As of 2023, the minimum wage in the Republic of Lithuania is monthly €840 per month or hourly €5.14. In other words, you are required to pay no less than €840 a month to full-time employees and no less than €5.14 multiplied by hours worked a month for part-time or unfixed schedule employees.
The Lithuanian minimum wage might seem rather modest in comparison with some other European ones. For instance, in Germany, it would be €2080, in France — €1709, and in Ireland — €1910. Therefore, this, combined with lower taxation, flexible business regulations, lower costs, and high availability of skilled labor, makes Lithuania a perfect place to start a business or expand.
However, you should take into consideration that the Lithuanian economy and, as a result, quality of life is rapidly improving. Therefore the minimum wage is significantly increasing year by year. Let’s take a look at how it evolved since 1996 — when such a term first appeared in Lithuanian law.
Note: before 2015, the Lithuanian minimum wage was counted in the country’s national currency — Litas. After that, the Euro became the official currency in the state. Litas had been tied to Euro since 2002 at the fixed rate, therefore estimations for that period are provided in Euro as well;
After 2019 the salaries were recounted as due to the new regulations, employers shifted the SODRA burden on employees’ salaries. The salaries before 2019 were recounted accordingly to better demonstrate the amount employees could actually get their hands on.
Historical changes:
| Year | Monthly wage | Hourly wage | Change (Monthly wage) | Change (Hourly wage) |
| 2023 | €840 | €5.14 | ⏶15.07% | ⏶14.99% |
| 2022 | €730 | €4.47 | ⏶13.71% | ⏶13.74% |
| 2021 | €642 | €3.93 | ⏶5.77% | ⏶5.65% |
| 2020 | €607 | €3.72 | ⏶9.37% | ⏶9.73% |
| 2019 | €555 | €3.39 | ⏶7.56% | ⏶7.28% |
| 2018 | €516 | €3.16 | ⏶5.31% | ⏶5.69% |
| 2017 | €490 | €2.99 | ⏶8.65% | ⏶8.73% |
| 2016 | €451 | €2.75 | ⏶7.64% | ⏶8.27% |
| 2015 | €419 | €2.54 | ⏶8.27% | ⏶8.09% |
| 2014 | €387 | €2.35 | – | ⏶0.88% |
| 2013 | €387/1334 Lt | €2.33/8.08 Lt | ⏶3.48% | ⏶2.64% |
| 2012 | €374/1289 Lt | €2.27/7.81 Lt | ⏶17.98% | ⏶18.23% |
| 2011 | €317/1096 Lt | €1.92/6.64 Lt | ⏶6.02% | ⏶6.67% |
| 2010 | €299/1031 Lt | €1.80/6.25 Lt | ⏶14.12% | ⏶15.38% |
| 2009 | €262/902 Lt | €1.56/5.40 Lt | ⏶16.96% | ⏶13.87% |
| 2008 | €224/773 Lt | €1.37/4.72 Lt | – | – |
| 2007 | €224/773 Lt | €1.37/4.70 Lt | ⏶8.74% | ⏶9.60% |
| 2006 | €206/709 Lt | €1.25/4.32 Lt | – | ⏶2.46% |
| 2005 | €206/709 Lt | €1.22/4.23 Lt | ⏶10.16% | ⏶10.91% |
| 2004 | €187/644 Lt | €1.10/3.80 Lt | ⏶11.31% | ⏶11.11% |
| 2003 | €168/580 Lt | €0.99/3.44 Lt | ⏶4.69% | ⏶5.52% |
| 1998 | 554 Lt | 3.26 Lt | ⏶7.36% | ⏶7.24% |
| 1997 | 516 Lt | 3.04 Lt | ⏶33.3% | ⏶33.92% |
| 1996 | 387 Lt | 2.27 Lt | – | – |
The minimum wage payroll tax formula
Like many other countries, Lithuania has a specific system of taxation – with the lesser portion taxed from the salary part equal to the minimum wage. It’s also revised by the state every year as a part of the income tax law.
There is a certain part of the minimum wage called the “Non-taxable income”, which, as worded, cannot be taxed by the state. Therefore, to claim part of their salary as non-taxable, employees must submit the corresponding application at their job. Besides, if one works several jobs at once, the application for tax deduction is eligible for only one workplace.
The non-taxable amount counts as follows:
- For salaries ≤ €1926: 400 – (0.18*(Initial Salary – 840)).
- For salaries exceeding €1926: 642 – (0.42*(Initial Salary – 840).
The Lithuanian law also sets the fixed non-taxable amount for persons with special needs. For those whose work capability is 0-25%, it is €1005, and for those with 30-55%, it is €935.
If you have a hard time counting the salary of your employees in Lithuania, you could always use our free salary calculator. And if you are interested in outsourcing payroll to a reliable partner, contact us!
