Salary calculator for Lithuania for 2023. Calculates gross salary to net salary or net to gross. You can also use it as a tax calculator (for Lithuania).
About salary calculator
The Salary Calculator is an online application for calculating the after-tax (cash/net) or before-tax (paper/gross) salary amount. Once you enter the gross salary amount, it will calculate the net salary. Entering the net salary amount will result in the calculation of the gross salary amount. The calculator also calculates the job costing (employer’s costs) for the given salary amounts and shows what the salary amount will be before and after tax.
The salary calculator also estimates Personal Income Tax and Social Security contributions. The calculator provides links to the pages of the National Social Fund Board (Sodra) and the National Tax Office, which contain the accounts for payment of the calculated taxes.
Remember: there is much more to payroll accounting than just salary. For instance, you need to keep databases, submit reports to the Tax Inspectorate and take care of invoices. Sometimes it’s a good idea to outsource these tasks – and we will be happy to give you a helping hand! Learn more about our payroll services and contact us!
Calculating net/gross salary
The major point of this application is to be a gross salary to net salary calculator for Lithuania. Just input the amount into one of the three cells in the first row of the calculator. It will calculate the values in the other two cells automatically.
Gross salary: The salary stated in the employment contract — this is the salary amount before taxation.
Net salary: The amount of the salary the employee receives after the deduction of the Personal Income Tax and the Social Security contributions.
Job costing: The expenditure amount the employer has to spend to cover the amount indicated in the “Paper salary” cell.
There is a list of specific settings the values of which might depend on the employer or/and the employee.
Tax-free income: only applies if the employee submits a request to the employer to apply it. If there was no request, you should choose “Not applicable”. In case the employee has limited work capacity due to a medical condition, you should choose the corresponding indication in the salary calculator.
Supplementary pension provision: Indicates whether the employee is saving for an additional pension portion, saving for it gradually, or not saving at all.
Type of contract: indicates whether the contract is fixed-term or open-ended (no fixed expiry date).
Type of employer: Choose “Private” if you are counting salary for a private limited company, small partnership, or other private employer forms
Employer group: Most of the employers belong to group I, so the spreadsheet will normally select this option. Employers get assigned to other groups by authorities if there have been accidents.
Year: The year for which you want to calculate the salary. The tax rates and calculation procedures vary from year to year.
Note: The salary calculator does not take into account the additional social security contributions required if the salary paid to the employee is less than the minimum monthly wage and the employee is not employed by another employer or otherwise insured.
Read more: Minimum Monthly Wage in Lithuania & Payroll Tax formula.
Calculating TFI (Tax-Free Income)
You can also use the salary calculator to count the applicable TFI (tax-free income). The TFI is only applied and part of the income is exempted if the employee requests the employer to apply it. The application can only be made for one employer (in case an employee has several jobs). The amount of TFI also depends on the employee’s working capacity.
If the worker’s medical condition allows for 0 to 25% working capacity, then the applicable tax-free income is a fixed amount: €1005 per month. If the working capacity is 30–55%, then the applicable amount of the TFI in 2023 would be €935 per month.
The standard TFI depends on the level of income because of the progressive tax system used by Lithuania. Thus, if monthly income is below €1926, the applicable TFI amount is calculated according to the following formula: TFI = 625 – 0.42 x (monthly salary – 840). Otherwise, the amount of the applicable TFI is calculated according to another formula: TFI = 400 – 0.18 x (monthly salary – 642). The minimum wage (€840) is used as a basis of this formula and is up to date since January 1, 2023.
How much taxes are paid on salaries in Lithuania?
The employer is the one responsible for calculating, deducting, and paying taxes for employees in Lithuania. In addition, the employer has to calculate and pay the social security tax that applies to employers.
The employer is responsible for calculating, deducting, and paying the tax. In addition, it’s also necessary to calculate and pay the social security tax that applies to employers.
The tax rates used in the calculator for 2022 and 2023 are shown in the table below:
|Personal income tax||20%|
|Employee’s social security contributions||19.5%|
|Employee’s contribution to supplementary pension insurance||3%|
|Employer’s social security contributions||1.77%|
The effective tax rate comes up to 40.6% (without TFI or saving for supplementary pension). It means that out of €100 from the gross salary €40.6 is used to pay all the necessary taxes and 59.4 ends up as the net salary.