The tax system in Lithuania is designed to provide social protection, but can be complicated for entrepreneurs. It is important to know which taxes belong to the employees and which belong to the employer.
Taxes paid by the employee
Employee pays:
- Personal income tax (PIT)
- Compulsory Health Insurance (CHI) contribution
- Social security contribution (SSD)
These fees may vary depending on the type of pension scheme and type of employment contract. They are automatically calculated on your salary.
Taxes paid by the employer
Social security contributions
The employer pays SSD contributions, accident insurance and provident fund contributions. If the employee is saving for a pension, part of the contributions is paid into the fund in addition. These charges are directly linked to the protection of workers.
Other possible company taxes
A company may pay corporation tax, VAT (if applicable), environmental taxes or other specific taxes depending on the nature of its activities. It is important to keep checking for changes in legislation and to consult your accountant to avoid mistakes.
Conclusion:
Tax awareness helps with financial planning, risk reduction and legal security for both employee and employer.
Accounting services in Kaunas and throughout Lithuania, as well as other related questions or answers by phone – +37061228888. Our team is ready to help.
