GPT calculator 2026
From 1 January 2026. Major changes to the Personal Income Tax (PIT) have come into force in Lithuania. Instead of the previously almost flat rate for everyone, there is now a progressive system of GPT (5%, 15%, 20%, 25%, 32%) – the more you earn, the higher the proportion of your income you pay in taxes. These changes affect absolutely everyone working in Lithuania: employees, sole traders, landlords, royalty earners and even those who sell real estate. We invite you to use the GPT Calculator 2026 tool to calculate your taxes.
* GPT is calculated automatically based on inputs. The table is updated according to the user’s data.
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New GPT rates for 2026: three tiers
Until the end of 2025, Lithuania had a relatively simple VAT system, with a 20% rate on labour income and 15% on most other income (dividends, self-employment). As of 1 January 2026, the system has changed substantially, following amendments to the Law on Personal Income Tax (No XV-343).
Three tiers of GPT rates
From 2026. all of a resident’s annual income (with some exceptions) is aggregated and taxed at progressive rates. The rates depend on the average wage (AWW), which in 2026 is €2,312.15 per month.
| Tariff | Annual income range | Amount in euro (2026) |
|---|---|---|
| 5 % | For the first €20,000 of profit, 5% GPT is applied | IDV if the profit for the year is below €42,500 |
| 15 % | IDV, property rental, property transfer up to 12 GST | 27745,80 € |
| 20 % | Up to 36 GVA | Up to €83 237,40 per year |
| 25 % | Between 36 and 60 GVA | From €83,237.40 to €138,729 per year |
| 32 % | Over 60 GVA | Over €138 729 per year |
It is important to understand that progressive taxation does not mean that all your income is taxed at a higher rate when you cross a threshold. The higher rate applies only to the part of your income that exceeds the threshold. For example, if you earn €100,000 a year, the first €83,237 is taxed at 20% and the remaining €16,763 at 25%.
What is the VDU and why is it important?
Average earnings are the indicator used to set the thresholds for GPT rates, the ceiling on social security contributions and other important amounts. 2026 m. 1 VDU = €2 312.15. As the VDU changes every year, so do the income thresholds at which the higher rates of GPT apply. This means that in 2027 these thresholds will be slightly different.
How is the new system different from the previous one?
Until 2026, the rates of GPT depended on the type of income: wages and salaries – 20%, dividends – 15%, and individual activities – some fixed rates. From 2026. rates are based on the total amount of annual income, not the type of income. This is a major paradigm shift: from now on, all types of income (with some exceptions) are aggregated and taxed together.
NPD formula for 2026 – what has changed?
The tax-free amount (TI) is the part of your income on which you don’t have to pay tax. The higher your TI, the less tax you pay. From 2026. The rules for applying the NIT have changed quite significantly.
The new NPD formula
2026 m. There is one NPD formula (previously there were two):
Monthly NIC = 747 – 0.49 × (DU – MMA)
Where:
- €747 – maximum monthly NIC (applies when salary does not exceed the MMA)
- DU – your monthly salary (gross)
- MMA – minimum monthly wage, €1,153 in 2026
- 0.49 – coefficient indicating how quickly the NPD decreases as salary increases
Up to what salary is the NHP?
The NIC is only applicable to employees whose gross monthly salary does not exceed €2,677.49. Above this amount, the NPD becomes zero and the full amount of GST is calculated on the total salary.
Here are some examples of NPD at different salaries:
| Gross salary | NPD rate | GPT base (gross – NPD) |
|---|---|---|
| 1 153 € (MMA) | 747 € | 406 € |
| 1 500 € | 577 € | 923 € |
| 2 000 € | 332 € | 1 668 € |
| 2 500 € | 87 € | 2 413 € |
| 2 678 € and more | 0 € | Full salary |
Why is the “second” NIC formula no longer applied?
Until 2025, there were two NPD formulas: one for lower salaries and one for slightly higher ones. The second formula allowed even those earning above the GNI to have at least a token NPD. From 2026. this second formula no longer exists. In practice, this means that those earning between around €2,400 and €2,700 gross have seen a slight increase in their tax burden – they have lost what little NPD they had before.
NPD for persons with reduced mobility
For people with a defined level of incapacity for work, the NPD rules remain more favourable:
- 0-25 % incapacity for work: monthly NDA of €1 127
- 30-55 % incapacity for work: monthly NDA of €1 057
These rates remain unchanged in 2026 and are fixed – they do not decrease as salaries increase (up to a certain threshold).
What income is aggregated for progressive income tax?
One of the biggest changes in the 2026 VAT reform is income aggregation. From now on, most of a person’s income will be added up at the end of the year and the total taxed at progressive rates.
Income INCLUDED in the total
The following are included in the progressive calculation of GPT:
- Remuneration (salary, allowances, bonuses, bonuses)
- Self-employment income based on a certificate (above certain thresholds)
- Royalties from employer
- Rental income (above the threshold of 12 GNI)
- Income from the sale of immovable property (above the threshold of 12 GNI)
- Business licence income exceeding €50 000 per year
- Income of the manager of a small partnership (who is not a member of the LLP)
- Income from activities in the Supervisory Board, Management Board
- Other non-employment income exceeding 12 GNI
Income that is NOT aggregated (exceptions)
Certain types of income continue to be taxed separately at a rate of 15% and are not included in the progressive scale:
- Dividends (distributed profits)
- Interest (up to 12 GNI)
- Life insurance benefits
- Social benefits (sickness, maternity, childcare, long-term work)
- Investment account income (up to certain limits)
- Proceeds from the sale of shares under options (if 3+ years pass)
- Pension fund benefits (transitional period 2026-2027)
- Agricultural income (taxed at 15% up to 60 GVA, 20% above)
12 GNI threshold for non-employment income
One particularly important rule is that non-employment income (rent, sale of property, interest, etc.) is subject to a threshold of 12 GNI ( €27,745.80 per year in 2026). Up to this threshold, such income is taxed at 15% and is not aggregated with other income. However, above the threshold of 12 VDU, the excess falls into the general progressive scale and is taxed at a rate of 20%, 25% or 32%, depending on the total annual amount.
Examples of GPT calculation
Theory is good, but it is best understood through concrete figures. Here are some typical scenarios showing how the new VAT system works.
Example 1: an employee with a gross monthly income of €2 000
| Indicator | Calculation | Amount |
|---|---|---|
| Gross salary | – | 2 000 € |
| NPD | 747 – 0,49 × (2 000 – 1 153) | 332 € |
| GPM base | 2 000 – 332 | 1 668 € |
| GPM (20%) | 1 668 × 0,20 | 334 € |
| VSD (12.52%) | 2 000 × 0,1252 | 250 € |
| PSD (6.98%) | 2 000 × 0,0698 | 140 € |
| In the hand | 2 000 – 334 – 250 – 140 | 1 276 € |
Annual income: €24,000 – below the threshold of 36 GNI, so all income is taxed at 20%. The change from 2025 is minimal.
Example 2: an employee with a gross monthly income of €5 000
| Indicator | Calculation | Amount |
|---|---|---|
| Gross salary | – | 2 000 € |
| NPD | €0 (above the threshold of €2 677) | 0 € |
| GPM (20%) | 5 000 × 0,20 | 1 000 € |
| VSD (12.52%) | 5 000 × 0,1252 | 626 € |
| PSD (6.98%) | 5 000 × 0,0698 | 349 € |
| In the hand | 5 000 – 1 000 – 626 – 349 | 3 025 € |
Annual income: €60,000 – still below the 36 GNI threshold. However, if the employee has additional income (rent, self-employment), the total annual income may exceed the threshold and you will have to pay extra tax at the end of the year.
Example 3: an employee earning €8 000 gross per month
Annual income: €96,000 – above the threshold of 36 VDU (€83,237.40).
| Revenue share | Tariff | GPT |
|---|---|---|
| The First 83 237,40 € | 20 % | 16 647 € |
| Remainder: €12 762,60 | 25 % | 3 191 € |
| Total GPT per year | – | 19 838 € |
The employer calculates the 20% GST during the month, so at the end of the year, when declaring income, there will be an obligation to pay the difference between the 20% and 25% rates for the part of the income that exceeds €83 237.
Let’s compare: in 2025 this employee would have paid 96 000 × 20% = € 19 200. 2026 m. – 19 838 €. Difference: €638 more per year.
Example 4: Employee with a salary of €4,000 + rental income of €2,000/month
Annual labour income: €48 000 Annual rental income: €24 000
Taxation of rental income: the total amount of €24,000 does not exceed 12 GVA (€27,745.80) and is therefore taxed at 15% and is not included in the progressive scale. Labour income is subject to a 20% rate as the €48,000 does not exceed the threshold of 36 VDU.
But if the rental income were, for example, €35,000 per year, then €27,745.80 would be taxed at 15% and the remaining €7,254.20 would be added to the employment income: €48,000 + €7,254 = €55,254. This amount is still below the threshold of 36 VDU, so the excess would be taxed at 20%.
Example 5: IT professional earning €100 000 per year
| Revenue share | Tariff | GPT |
|---|---|---|
| The First 83 237,40 € | 20 % | 16 647 € |
| Remainder: €12 762,60 | 25 % | 4 191 € |
| Total GPT per year | – | 20 838 € |
2025 m. The GPT would have been: 100 000 × 20% = €20 000. The difference: €838 more per year, or about €70 per month.
GPT for individual activities from 2026
For self-employed persons with a certificate, the changes in 2026 are quite significant. While the form of the activity itself has not changed, the logic of tax calculation has become more complex.
Is there still a 30% deduction allowance?
Yes. Self-employed persons with a certificate can still choose to deduct 30% of their income as an allowable deduction (without supporting documents) or deduct the actual costs of the activity. This deduction has not been abolished.
Tax credits and progressive thresholds
From 2026. Self-employment income is subject to a new progressive scheme with tax credits:
| Taxable income (after deductions) | Effective VAT rate |
|---|---|
| Up to 20 000 € | ~5% (tax credit) |
| 20 000 – 42 500 € | Gradual increase from 5% to 20% |
| Over €42 500 | Income is included in the general progressive scale (20/25/32%) |
The tax credit is a mechanism that reduces the effective rate of GPT for low-income self-employed workers. However, the credit gradually decreases as income rises and disappears completely at the €42,500 threshold. From this amount, the income of the sole proprietorship is aggregated with other income and taxed at the general progressive rates.
Business licence and €50 000 threshold
Activities with a business licence up to €50,000 of annual income are subject to the same flat-rate GST as before. However, above the threshold of € 50,000, the excess:
- Taxable as self-employment income on the basis of a certificate
- Aggregated with other income for the progressive scale
This is a new rule that business licence holders should follow closely.
Is it worth switching from a sole proprietorship to an MB or a UAB?
This issue has become particularly relevant in 2026. From a certain income threshold onwards, the form of a small partnership (LLP) or a private limited company (LLP) may become more attractive for tax purposes because:
- Corporate tax (17% or 7% reduced) may be lower than personal tax
- Dividends are taxed at 15% and are not aggregated with other income
- An MB or LLC provides limited civil liability
We recommend you consult an accountant if your sole proprietorship income exceeds €40,000-50,000 per year, in which case a change of form can save you a significant amount of money.
GPT on royalties and bonuses
Royalties
From 2026. the taxation of royalties has changed in two ways. Non-employment royalties up to 12 VDU (€27,745.80) per year are subject to a 15% rate of GPT and are not aggregated with other income. However, above the threshold of 12 VDU, the part of the royalties above this threshold is included in the general progressive scale.
For authors who receive royalties from their employer (Class A income), this income is aggregated with their wages and taxed at progressive rates from €1.
Tantiemos
Royalties (remuneration of members of the Management Board, Supervisory Board) are fully included in the progressive income scale from 2026 – they are aggregated with all other income and taxed at a rate of 20%, 25% or 32%, depending on the total annual amount.
For employers: how to prepare for the new GPT system?
Payroll systems
Employers must ensure that their accounting software supports the new GST rates and NPD formula. As the employer’s standard rate of VAT is 20% during the month, most of the changes will only be reflected in the annual income tax return. However, an employee has the right to request the employer to apply a higher rate of GPT (25% or 32%) if he/she knows that his/her annual income will exceed the threshold of 36 VDU. This helps to avoid a high amount of tax due at the end of the year.
Health insurance premiums over €350
From 2026. Employer contributions to voluntary health insurance above €350 per year are treated as income in kind and taxed as wages – i.e. subject to GST and social security contributions on the excess.
Net remuneration agreements – a big risk
If you and your employee have agreed on a specific salary “in hand” (net), this practice becomes particularly risky for the employer in 2026. As the NPD formula has changed and the NPD is falling faster for higher salaries than before, the employer will have to bear the increased tax burden to maintain the same net salary. It is recommended to move to gross salary arrangements so that tax changes do not fall solely on the employer.
NPD for children from 2027
Although this benefit is not yet available for the 2026 tax year, it is worth knowing that the additional NIC for children will apply from 2027:
- For employees: additional annual NIC of €1,044 for each child (up to 18 or up to 23 if enrolled in a general education programme)
- For sole traders: additional tax credit of €208.80 per child
This benefit will apply for the first time when declaring income in 2027 (until 1 May 2028). The benefit can only be claimed by one parent for the same child.
Declaring income and possible “surprises”
The new progressive GPT system means that in spring 2027, when declaring income for 2026, many people may face a first-time liability to pay additional GPT.
When does the liability to pay additional VAT arise?
The following cases may result in an additional GPT liability:
- Your annual employment income exceeded €83,237 (36 GVA) – your employer charged 20% for the whole year, but part of your income should have been charged at 25% or 32%
- You received income from several employers at the same time – each applying 20%, but the total annual amount exceeded 36 GVA
- You had employment income and additional taxable income (self-employment, rents above 12 GVA, etc.)
- Over-applied NICs during the year (e.g. you received bonuses or worked in several jobs)
How to avoid unpleasant surprises?
Some practical tips to help you prepare:
Keep track of your annual income. If you see it approaching or exceeding the €83,237 threshold, ask your employer to apply a 25% rate of VAT for the remaining months.
Ask to be exempted from NNI. If you work in several jobs or have additional sources of income, it’s better not to apply the NIC at all during the month. This way you will pay a little more VAT during the year, but at the end of the year you can recover the overpayment instead of having to pay extra.
Put aside a “reserve” amount. If you know your income will exceed the 36 GNI threshold, set aside at least 5-10% of the excess as a tax “reserve”.
Deadlines for declaring income and late payment penalties
The annual income tax return (GPM311) is due by 1 May (for the previous year). The amount of GPT due must be paid by the same date. Late payment is subject to interest – in 2026 the rate is 0.026% for each day of delay.
Refunds of overpaid VAT (where you have paid more than you should have) are due by 31 July if your return is submitted on time. If your return is submitted or revised after 2 May, the overpayment is refunded within 90 days.
Taxation of property sales from 2026
Income from the sale of real estate is also included in the progressive scale from 2026, but there are some important exemptions:
When sales of property are exempt from VAT:
- You are selling a home where you have declared your residence for the last 2 years
- You have been resident in the property for less than 2 years, but within 12 months of the sale you have bought another property and declared your residence there
- The property has been in your ownership for more than 5 years (reduced from 10 to 5 years from 2026)
For taxable sales: the part of the sale proceeds up to 12 GST (€27,745.80) is taxed at a rate of 15%. The part above that is aggregated with other income and taxed at progressive rates. The sale proceeds can be deducted from the sale proceeds by deducting the costs related to the sale: notary’s fees, registration fees, surveying costs, major renovation costs.
Frequently Asked Questions (FAQs)
How much GPT will I pay on a salary of €3,000 in 2026?
From a gross salary of €3,000 onwards, no NIT applies (as it exceeds the threshold of €2,677). GPM = 3 000 × 20% = € 600. The annual income (€ 36 000) does not exceed the threshold of 36 GNI, so only the 20% rate applies to all income. No additional GST liability will arise at the end of the year if you have no other sources of income.
Will everyone pay more GPT from 2026?
No. Most workers with an annual income of up to €83,237 (around €6,900 per month gross) will pay the same or very similar amount of GPT. The changes will be felt most by those with incomes above this threshold or who receive income from several sources.
Are pensions taxed progressively?
Social security pensions are subject to a 15% VAT rate and are not aggregated with other income for the purposes of the progressive scale. Thus, pensioners receiving only a pension will not have to pay additional GPT.
What is the starting point for the 25% VAT rate?
The 25% rate starts to apply to the part of the annual income that exceeds €83,237.40 (36 GNI). This corresponds to a gross monthly income of approximately € 6 936. Important: The 25% rate applies only to the excess part and not to the entire income.
What is the starting point for the 32% VAT rate?
The 32% rate applies to the part of the annual income that exceeds €138,729 (60 GNI) per year, which corresponds to approximately €11,561 gross per month.
Can I get back my overpaid VAT?
Yes. If you paid more GPT than you should have paid during the year (e.g. too little NPD was applied or you didn’t pay during the year), if you file your annual income tax return (GPM311) by 1 May, you’ll get a refund of the overpayment by 31 July.
How is my tax calculated if I receive income from abroad?
Permanent residents of Lithuania must declare all income received worldwide. Income received from abroad is combined with income received in Lithuania and the total amount is taxed at progressive rates. However, if you have already paid tax abroad on this income, you can apply the double taxation provisions – the amount of tax paid abroad can be deducted from the amount of GPT payable in Lithuania.
Are dividends taxed progressively?
No. Dividends (distributed profits) are subject to a fixed rate of 15% VAT, regardless of the amount. Dividends are not aggregated with other income and do not affect the application of the progressive rate.
Do I have to submit the REG812 form before I start my business?
Yes, from 2026 onwards, before starting any type of individual activity, it is necessary to inform the STI at least 1 working day in advance by submitting the REG812 form.
National Insurance contributions in 2026 – what else is there to know?
Although the rates of the Sodros contributions in 2026 have not changed substantially, several nuances are important alongside the changes in the GPM.
Employee social security contributions
Employees pay 12.52% of their gross salary in the form of SSD (national social security) (if they do not save for a Tier II pension) or 15.52% (if they do), and 6.98% in the form of PSD (compulsory health insurance). The total tax and contribution burden on the employee’s gross salary is about 39.5% (GPT 20% + SSD 12.52% + PSD 6.98%) if the NPD is not applied and no additional pension is accumulated.
The “ceiling” for employees’ SSD contributions is €138,729 per year (60 GNI). On the part of the income above this amount, the SSD contributions will no longer be calculated. Self-employed persons have a lower ceiling of € 99,422.45 (43 GNI).
Second pillar pension accumulation
From 2026. participation in second pillar pensions has become voluntary. Previously, there was a system of automatic enrolment, where an employee could opt out but was enrolled by default. Now it is up to each employee to decide whether he or she wants to contribute more. Those who save in addition pay 3% of their gross salary and the State adds 1.5%. It is important to weigh up whether additional saving is financially worthwhile for you, especially in view of the increased GPT burden for higher income earners.
GPT 2025 vs. 2026: comparison table
To help you understand exactly what has changed, here is a comparison of key indicators:
| Indicator | 2025 m. | 2026 m. |
|---|---|---|
| GPT on labour income | 20% (flat) | 20 / 25 / 32% (progressive) |
| GPT for individual activities | 5-15 % | 5-32% (depending on amount) |
| GPT on dividends | 15 % | 15% (unchanged) |
| Number of NPD formulas | 2 | 1 |
| Maximum monthly NPD | 747 € | 747 € (unchanged) |
| NPD threshold | ~ €2 864 gross | ~ €2 677 gross |
| MMA | 1 038 € | 1 153 € |
| VDU | 2 054,28 € | 2 312,15 € |
| Aggregation of income | Not applicable | Applicable (with exceptions) |
| Deadline for exemption from property tax | 10 years | 5 years |
| Health insurance limit | Total amount tax-free | Up to 350 €/m. tax free |
As can be seen from the table, the change is wide-ranging and touches on many areas – not only GPT rates, but also the application of the NPD, the principle of aggregation of income, and even the rules on the sale of property.
Practical tips for different situations
If you are an employee with one workplace
Your situation is simple. If your monthly gross salary is below ~€6,900 (€83,237 per year), you will not need to do anything extra – your employer will calculate the 20% GST and there will be no additional liability at the end of the year. If your salary is higher, ask your employer to apply a higher rate of GPT so that you do not have to pay extra on your tax return.
If you work in several jobs
Be extra careful. Each employer individually applies a 20% GPT, but the total annual income can easily exceed the 36 VDU threshold. We recommend that you apply the NIC in only one (main) place of work and not at all in others. This will reduce the risk of having to pay a large amount at the end of the year.
If you are self-employed alongside your work
The new system particularly affects people who are employed and self-employed. From 2026. all these revenues will be added together. For example, if you receive a gross salary of €3,000 (€36,000 per year) and another €30,000 from your self-employed activities, the total taxable amount (after deductions) may approach or exceed the 36 GNI threshold. Practical tip: Calculate your annual income from all sources on a quarterly basis and, if you see it approaching the threshold, set aside some money for tax.
If you are renting out a property
Rental income up to 12 VDU (€27,745.80) per year is taxed at a rate of 15% and is not aggregated with employment income – a favourable scenario. However, if you rent out several properties or if the price is high, the income may exceed this limit. In this case, the excess will be added to employment income and taxed at progressive rates. It is also worth considering whether to run the rental as a sole proprietorship with a business licence (for amounts up to €50,000) – this may be more tax efficient than declaring it as property income.
If you are planning to sell a property
Good news – the tax-free period for selling property has been reduced from 10 to 5 years. If you have owned the property for more than 5 years, the sale proceeds will be exempt from GPT. However, if you have owned it for a shorter period of time, the sale proceeds will fall into the progressive scale, so it is particularly important to consider how they will affect your overall annual tax burden.
Summary
2026 m. The GPT reform is the biggest change in personal income taxation in Lithuania in the last decade. Key points to remember:
The progressive system of GPT with three tiers (20%, 25%, 32%) means that higher income earners will pay proportionally more GPT. The NPD formula has been simplified, but the tax burden for middle-income earners has increased slightly. All types of income (with some exceptions) are now aggregated at the end of the year – this is particularly important for those with multiple sources of income. For sole traders, it is worth evaluating whether it would be more advantageous to switch to the MB or UAB form.
Use our GPT calculator regularly to make sure you always know your tax situation and don’t get a nasty surprise at the end of the year.
Need help with your taxes?
The new GPT system is more complex than the previous one, and each person’s situation is individual. If you are not sure how the new taxes will affect your income, or if you want to optimise your tax burden, contact elvprojektai.lt’s accountancy specialists.
We will help:
- Accurately calculate your GPT, taking into account all sources of income
- Advise on whether it is worth changing the form of business (IV → MB / UAB)
- Preparing and submitting your annual income tax return
- Advice on tax planning and optimisation
Contact us today – a consultation costs nothing,
and can save you hundreds or even thousands of euros.
Sources: the State Tax Inspectorate (vmi.lt), the Ministry of Finance (finmin.lrv.lt), Sodra (sodra.lt), Amendments to the Law No IX-1007 on the Personal Income Tax (No XV-343).
