We would like to inform that according to October 11 2017 Government of the Republic of Lithuania Resolution no. 814 "Regarding the Minimum Wage” monthly minimum wage rises by 20 EUR - from 380 EUR to 400 EUR and the hourly wage - from 2,32 EUR to 2,45 EUR, as of January 1 2018.
This amendment is applied automatically to employees who receive minimum wage or wage lower than 400 EUR (or respectively lower hourly rate than 2,45 EUR). The increase in the minimum monthly / hourly pay will affect these employees in 2018 January-March while calculating holiday, sickness benefit. This amendment will also mean that daily subsistence allowance for travel abroad will not be taxed if the monthly salary is higher than € 520 or an hourly wage will be higher than € 3,19 per hour.
Please note that with increased minimal monthly / hourly wage respectively increases personal income tax (PIT) deducted from affected employee’s salary.
Also there are changes in PIT law articles IX-1007 amendments from which the most relevant to payroll is Article 20. It relates to changes of non taxable incomes.
The non taxable incomes for the tax period is subject to the following procedure:
1) a person whose monthly income does not exceed the minimum monthly wage valid for these calendar year applies a monthly non taxable amount of 380 EUR;
2) for a person whose income related to an employment relationship or a relationship of substance corresponds exceeds the minimum monthly salary valid for these calendar year to the following formula applies:
Monthly non taxable incomes = 380 - 0.5 x (earned incomes related to employment relationship - minimum monthly wage applicable on these calendar years)
For persons who have been assigned 0-25 percent incapacity for work, or persons who have reached the retirement age, who have a high level of special needs according to the procedure established by law or persons who are severely disadvantaged under the statutory procedure, the monthly non taxable amout is 450 EUR. Persons who have been assigned 30-55 per cent incapacity to work or persons who have reached the retirement age, who have a moderate level of special needs in accordance with the procedure established by law or mild disability levels - the monthly non taxable amout is 390 EUR.
Starting the next year ,according to the adjusted tax reform plan, an additional non taxable amount for children is forfeited, and each child up to 18 years old will be paid a monthly payment of 30 EUR and for a third child and more - 75 EUR, without considering the family income.