How We Calculate Lithuanian Net Pay — Methodology

How we calculate Lithuanian net pay

The calculator follows the Personal Income Tax Act, the State Social Insurance Act, the Health Insurance Act, the Pension Accumulation Act and the yearly social fund budget laws. Every figure comes from the consolidated texts in the Seimas legal register (e-seimas) and from Government resolutions — see data sources.

Income tax and the NPD

The employer withholds 20% income tax on pay less the NPD (tax-free amount). The NPD applies only on request and with one employer only. In 2026 the monthly NPD is €747 while pay does not exceed the minimum wage (€1,153), and 747 − 0.49 × (pay − 1153) above it, until it reaches zero. In 2025 the minimum wage was €1,038, and above €2,387.29 the formula 400 − 0.18 × (pay − 642) applied. Social and health insurance do not reduce the tax base.

Annual rates

In 2026 the part of annual income up to 36 average wages (€83,237.40) is taxed at 20%, from 36 to 60 average wages (€138,729.00) at 25%, and above 60 at 32%. In 2025 there were two rates: 20% up to 60 average wages (€126,532.80) and 32% above. Since 2026 the employer applies the rate by the size of each payment, so the higher rates are normally settled in the annual return. For both years we show monthly withholding at 20% and the higher-rate part in the annual estimate.

Social and health insurance

The employee pays 12.52% social insurance (pension 8.72%, sickness 1.99%, maternity 1.81%) and 6.98% health insurance. Social insurance is charged on at most 60 average wages a year; once the ceiling is reached, none is due for the rest of the year, while health insurance continues on all pay. Members of pension accumulation pay 3% of the pay on which social insurance is due.

Annual return

After the year, income tax is recalculated with the annual NPD and the annual rates; the difference is refunded or paid. The estimate assumes the same pay every month and no other income or reliefs.

Employer cost

The employer pays unemployment insurance of 1.31% (2.03% for fixed-term contracts), accident insurance of 0.14% (rate group I), 0.16% to the Guarantee Fund and 0.16% to the Long-term Employment Benefit Fund — 1.77% in total. We charge the last two on all pay. Where pay is below the minimum wage, the employer pays the employee's and its own social insurance on the difference out of its own funds; exceptions apply, for example, to people under 24, pensioners and people with a participation level of 0–55%.

Tests

Test	Scope	Result
NPD formulas	Three 2025 and two 2026 NPD formulas, the annual NPD, continuity at €2,387.29	Tested
Contribution rates	12.52% + 6.98%, employer 1.77% (2.49%), average wage €2,108.88 and €2,312.15	Tested
Worked example at €2,000 (2026)	NPD 331.97, tax 333.61, VSD 250.40, PSD 139.60, net €1,276.39 — worked by hand	Matching
60 average-wage ceiling	€15,000 a month: social insurance stops in October, annual tax at 20, 25 and 32%	Tested
Minimum-wage gap	Employer contributions on the gap up to €1,153	Tested

Not yet included

The NPD for people with disabilities (€1,057 and €1,127) and other special cases.
Several employers, copyright contracts, self-employment and business certificates.
Extra pension accumulation contributions, the third pillar, life insurance and other reliefs in the annual return.
Sickness benefits, holiday pay, bonuses and other irregular payments.
Accident insurance rate groups II to IV.
A comparison with the VMI and Sodra calculators (their websites cannot be reached automatically).

Estimates only. Not tax, legal or financial advice.