Two types of taxes are calculated from the salary: “employee’s taxes” deducted from the salary stated in the employment agreement, and “employer’s taxes” calculated on top of the gross salary. Currently, employer’s taxes outweigh the employee’s taxes.

With the change, most of the taxes will be deducted from the salary fixed in the employment contract, therefore employee’s taxes will significantly increase. To ensure that the net salary earned by the employees is not negatively affected by the changes in tax system, the employers will be obliged to recalculate gross salary of employees by multiplying current gross salary by the coefficient of 1,289.

Other tax system changes also apply from 2019:
· ceilings for social security contributions are introduced;
· progressive PIT is introduced;
· nontaxable income amounts are changed.

To see the examples of new tax calculation system, please visit our Lithuanian website: