2024-01-10-KPMG_Global-Lithuania_–_Changes_in_Taxation_of_Employment-Related_Income_for_2024_3页_336kb

Lithuania: 2024 Changes in Taxation of Employment-Related Income

Effective from January 1, 2024, Lithuania approved changes to the social security contribution (SSC) base and progressive personal income tax (PIT) calculation.

• Approved Average Monthly Salary for Tax Purposes: EUR 1,902.70.
• SSC Ceiling: EUR 114,162 (was EUR 101,094 in 2023).
  • SSC Rates:
    • For income up to the ceiling: Employer's part at 1.77%, Employee's part at 19.5% (additional 3% if participating in a second pillar pension fund).
    • For income exceeding the ceiling: Employer's part at 1.77%, Employee's part at 6.98%.
• PIT Rates: For total annual employment-related income up to EUR 114,162 (at 20%), and above at 32%.

These changes impact employers, particularly in assignments or expatriations subject to Lithuanian taxation, requiring adjustments in payroll, budgeting, and withholding taxes.

KPMG recommends consulting qualified tax professionals or the GMS team for compliance.