Submit RFP
cancel
Submit RFP
Previous search terms

    Lithuania - Changes in Taxation of Employment-Related Income for 2022

    GMS Flash Alert 2022-009/

    event 13 Jan, 2022

    Lithuania’s government approved the country’s 2022 average monthly salary used for the social security contribution (SSC) base and the progressive personal income tax (PIT) calculation.1

    WHY THIS MATTERS

    Following the 2019 tax reform, caps for the SSC (the “SSC ceiling”) and progressive income tax rates were introduced.  The value of the SSC ceiling and threshold for progressive PIT amounts to 60 times the average monthly salary and that changes every year as the country’s average salary tends to increase.

    In cases of assignments to Lithuania where assignees are subject to Lithuanian taxation, and for assignees working outside Lithuania but still subject to Lithuanian taxation, international assignment cost projections and budgeting should reflect the changes described.  Where appropriate, adjustments to gross-up packages and withholding taxes may need to be considered.

    Summary of Taxation of Employment-Related Income As of 2022

    The approved average monthly salary amount (applicable for tax purposes) is EUR 1,504.10.

    • The ceiling for SSC (except for mandatory health insurance contributions and employer’s contributions) is set at EUR 90,246 (EUR 81,162 in 2021)
    • The standard SSC rates for income up to the SSC ceiling:
      • Employer’s part – 1.77 percent (1.61 percent for foreign employers)
      • Employee’s part – 19.5 percent (additional 2.7 percent or 3 percent is withheld if the employee is participating in a certain second pillar pension accumulation fund).
    • The standard SSC rate for income exceeding the SSC ceiling:
      • Employee’s part – 6.98 percent
      • Employer’s part – 1.77 percent (1.61 percent for foreign employers).
    • PIT rates for total annual employment-related income together with remuneration paid for activities of the supervisory or management board and certain income of managers of small partnerships:
      • 20 percent for income up to EUR 90,246 (EUR 81,162 in 2021)
      • 32 percent for income exceeding EUR 90,246 (EUR 81,162 in 2021).

    KPMG NOTE

    The laws introducing the changes were approved by the parliament of Lithuania on 14 December 2021 and signed by the president on 22 December 2021.  The changes became effective as of 1 January 2022.

    1  Legislative changes (Valstybinio socialinio draudimo fondo biudžeto 2022 metų rodiklių patvirtinimo įstatymas) accepted by the Parliament of Lithuania (in Lithuanian).

    Our People

    Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.

    Birutė Petrauskaitė
    Birutė Petrauskaitė

    Partner, Head of Tax Services

    KPMG in Lithuania

    Ignas Ričkus
    Ignas Ričkus

    Manager, Tax

    KPMG in Lithuania

    GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

    © 2024 KPMG, an Irish partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

    For more detail about the structure of the KPMG global organisation please visit https://kpmg.com/governance.

    Lorem Ipsum

    Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.

    Lorem Ipsum