How is salary calculated in Lithuania?
In Lithuania, the employment contract specifies gross (before tax) salary. Social security contributions and personal income tax (GPM) are deducted from it, and the remaining amount is the net salary you receive.
2026 tax rates
Social security (employee): 19.5% or 22.5% (with pension pillar II). Social security (employer): 1.77%.
Income tax: 20% (up to €82,962/yr), 25% (€82,962–€138,270/yr), 32% (above €138,270/yr).
What is non-taxable income (NPD)?
NPD reduces taxable income. The 2026 base NPD is €747. Formula: NPD = 747 – 0.49 × (salary – MMA), where MMA = €1,153. Those earning MMA or less receive the full NPD. NPD does not apply when gross salary exceeds a certain threshold.
Salary calculation example
For example, with a gross salary of €2,000/month (without pension pillar II): Social security (19.5%) = €390. NPD = 747 – 0.49 × (2000 – 1153) = €331.97. Taxable income = 2000 – 390 – 331.97 = €1,278.03. Income tax (20%) = €255.61. Net salary = 2000 – 390 – 255.61 = €1,354.39.
What is pension pillar II?
Pension pillar II is an additional pension savings scheme. When participating, an extra 3% of gross salary is transferred to a pension fund, increasing the social security contribution to 22.5%. This reduces current net pay but increases future pension benefits.
How much does an employee cost the employer?
In addition to the employee's salary, the employer pays an additional 1.77% social security contribution. Total employer cost = gross salary + employer's social security. For example, with a gross salary of €2,000, the employer cost = 2000 + 35.40 = €2,035.40.
Who benefits from this salary calculator?
This calculator helps employees understand their take-home pay and employers calculate the total cost of employment. It is also useful before job interviews, when negotiating salary or planning a household budget.