20221221-KPMG_Global-Lithuania_–_Changes_in_Taxation_of_Employment-Related_Income_for_2023_3页_336kb

Lithuania's government approved changes to the social security contribution (SSC) and progressive personal income tax (PIT) bases for 2023. The approved average monthly salary for tax purposes is EUR 1,684.90. The SSC ceiling and PIT income thresholds are set at 60 times this average, resulting in a higher ceiling of EUR 101,094 for 2023. SSC rates include an employer's part at 1.77% and employee's part at 19.5% (plus an additional 3% for certain pension funds), and for income above the ceiling, it is 6.98% for employees and 1.77% for employers. PIT rates are 20% for income up to EUR 101,094 and 32% above that. These changes, effective from 1 January 2023 after parliamentary approval in November 2022, impact international assignments by requiring adjustments for cost projections, gross-up packages, and withholding taxes.