The minimum wage, also known as the minimum monthly wage (MMA) or simply the minimum wage, is a monetary amount set by the government that defines the minimum amount an employer can pay an employee for a month’s work at a full-time job (40 hours per week in Lithuania).
Bear in mind that this figure only defines the contractual wage, also known as the “paper” wage, from which personal income tax, PSD and pension and social security contributions are deducted.
Minimum wage in Lithuania
Minimum wage 2021 – €642 (applicable from 01.01.2021 – 31.12.2021)
As of 1 July 2017, with the entry into force of the new Labour Code, the minimum wage can only apply to unskilled work (i.e. work without any specific qualification requirements).
History of minimum wage changes:
- EUR 642, from 01.01.2021
- 607 EUR, from 01.01.2020
- €555, from 01.01.2019 (equivalent to €430 under the old tax system)
- 400 EUR, as of 01.01.2018
- 380 EUR, from 01.07.2016
- 350 EUR, from 01.01.2016
- 325 EUR, from 01.07.2015
- LTL 1035 (EUR 300), from 01.10.2014
- 1000 Lt (289,6 EUR), as of 01.01.2013
- LTL 850 (EUR 246.2), as from 1 August 2012
- LTL 800 (EUR 231,7), from 1 January 2008
- 700 Lt (EUR 202,7), as from 1 July 2007
- LTL 600 (EUR 173,8), from 1 July 2006
As 2019 sees a relatively substantial tax reform, with an increase in the “paper” wage, the minimum wage has risen accordingly, to €555 (equivalent to €430 under the tax system in force before the start of 2019). It has not yet been defined how much the marginal wage is expected to increase in 2020, but with the rapid growth of average wages – the increase itself is most likely inevitable.
History of the gross minimum wage in Lithuania
Minimum wage in hand
As we have already mentioned, the minimum wage is a “paper wage“, while the “hand wage“, or the wage a person actually receives, is always lower because taxes(income tax, health insurance, and pension and social security contributions) are deducted from it.
The exact amount of money a minimum wage earner will get depends on the NPD (tax-free allowance) that applies to them. The NPD applied in turn depends not only on the amount of the salary, but also on sickness absence groups and pension saving options. For example, from the beginning of 2021, a person earning the minimum wage of 642 EUR who earns a monthly salary of 64642 per month, does not have any special incapacity groups and does not save in a pension fund, will receive the following after tax €468.41 “in hand”.
Minimum hourly wage
The minimum hourly wage in Lithuania is €3.93 (valid from 1 January 2020).
Previous hourly rates:
- 3,93 EUR, from 01.01.2021
- 3,72 EUR, from 1.1.2020
- 3,39 EUR, from 01 01 01 2019
- 2,45 EUR, from 01.01.2018
- 2,32 EUR, from 01.07.2016
- 2,13 EUR, from 01.01.2016
- 1,97 EUR, from 01.07.2015
- LTL 6,27 (EUR 1,82), from 01.10.2014
