How Lithuania's 2026 Minimum Wage Increase Impacts Payroll And Taxes

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Starting January 1, 2026, Lithuania's minimum wage will increase by approximately 11.1%, following a decision approved by the government.

Lithuania Employment and HR

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Starting January 1, 2026, Lithuania's minimum wage will increase by approximately 11.1%, following a decision approved by the government. This adjustment is part of a broader strategy aiming to improve income levels and ensure better social security contributions for workers.

New Minimum Wage and Hourly Rate

From the beginning of 2026, the new gross minimum monthly wage (MMA) will be set at €1,153, up from €1,038 in 2025. Meanwhile, the minimum hourly rate will rise to €7.05, compared to the current €6.35.

Impact on Contributions and Thresholds

These changes will also have an impact on several related contributions and thresholds:

Health Insurance (PSD): Mandatory monthly health insurance contributions (PSD) will increase to €80.48, as they are calculated as 6.98% of the minimum wage.
Social security (VSD): Contributions for self-employed individuals with business certificates, as well as some farmers who contribute based on MMA, will also go up accordingly.

Posted Workers and Tax Implications

For workers posted abroad, in order to avoid personal income tax (GPM), the minimum allowable gross wage will rise to €1,902.45 per month or €11.63 per hour. This is calculated by multiplying the new MMA and hourly rate by a factor of 1.65.

Updates to Non-Taxable Income (NPD) and Social Insurance Floor Adjustment

A change to the non-taxable income amount (NPD) is also expected, as the method for calculating NPD will be updated starting in 2026.

The “floor” for social insurance contributions (“Sodra grindys”) will be raised to reflect the new MMA, ensuring that employees are covered by social security based on at least the minimum wage.

Preparing for Payroll Changes

These updates aim to support fair wages and ensure stronger social protection. Employers should begin preparing for payroll changes and adjust their systems and contracts where necessary.

What Eurofast Can Do

The new minimum wage affects payroll, contributions, and employment contracts. Our experts at Eurofast Lithuania can assist you:

Adjust payroll and HR systems in line with the new rates.
Ensure accurate social and health insurance calculations.
Review contracts and compliance for local and posted workers.

Our team provides reliable, up-to-date payroll support across Lithuania and the region, ensuring your business stays compliant and efficient.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.