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Social contribution changes

Kristina Mikučionienė Kristina Mikučionienė

Social contribution changes from the 1st of July, 2018, applicable when employee is paid less than minimum monthly wage

Be informed, that in accordance with article 10 (7) of the law on State Social Insurance starting 1st of July 2018 employers are obliged pay not only the employer contributions, not less than calculated from minimum monthly wage (MMW), but also employee contributions part, calculated from the difference between MMW and employees calculated salary.

We remind, that MMW in Lithuania currently is 400 Eur.

For example, if the employee works on permanent employment agreement and is paid calculated salary of 300 Eur, then the witholding from employee will be 27 Eur (300 Eur x 9%). The employer will have to pay 133.72 Eur contributions ((300 Eur x 31.18%) + (100 Eur x 40.18%)), if the employee has chosen to pay additional funds for the pension at his own expense, then the employer will have to pay 135.75 Eur ((300 Eur x 31.18%) + (100 Eur x 42.18%)).

Exceptions are applied to employees up to 24 years of age, pensioners, persons with disabilities and employees who work for more than one employer. The contributions of these individuals, both employer and employee, will continue to be calculated from the calculated wage.

The data about additional calculated contributions for employees will be provided to employers by Sodra after the end of the month.