Employer Tax Contributions

Tax Type	Rate	Base
State Social Insurance (Sodra)	1.77% (permanent); 2.49% (fixed-term)	Employee's gross salary
Guarantee Fund	0.16%	Gross salary payable to employee
Long-term Employment Fund	0.16%	Employee's gross salary
Work Accidents & Occupational Diseases Insurance	0.14%-1.4%	Gross salary (category-dependent)

Filing & Compliance

• Monthly Sodra (social security) declarations (SAM forms) are due by the 15th of the following month.
• Monthly Personal Income Tax (PIT) declarations (GPM312 form) are due by the 15th of the following month.
• Annual Employee Income Declarations (GPM311 form) are due by February 15th of the following year.

In Lithuania, employee tax deductions encompass several areas, including income tax, social security contributions, and specific deductible expenses.

Income Tax

• Progressive Rates: A progressive income tax system applies to employment income. The standard rate is 20% for annual income up to €126,532.80. Income exceeding this threshold is taxed at 32%. A reduced 15% rate applies to sickness pay.
• Tax-Exempt Amount (TEA): A monthly TEA reduces the taxable base for employment income. The TEA is €747 for monthly income up to €1,038. For income between €1,038 and €2,387.29, the TEA is calculated as €747 - 0.49 * (Income - €1,038). For income between €2,387.29 and €2,865, the TEA calculation is €400 – 0.18 * (Income - €642). The TEA is proportionally reduced as income increases and ceases above a certain threshold.
• Withholding: Employers withhold income tax at source and remit it to the State Tax Inspectorate monthly. Payments are due by the 15th of the following month if salary was paid between 1st-15th. If Salary was paid between 16th-31th, then due date is 31st.

Social Security Contributions

• Employee Contributions: Employees contribute to social security, including health insurance, and pension.
• Contribution Ceiling: For employment income from a single employer exceeding €126,532.80 annually, contribution ceilings apply. Compulsory health insurance contributions (6.98%) do not have a ceiling.
• Multiple Employers: If an employee works for multiple employers and their combined income exceeds €126,532.80, they are entitled to a refund of social security contributions exceeding the calculated amount on their total earnings.

Deductible Expenses

• Limited Deductions: Certain expenses can be deducted from taxable income, including life insurance premiums, pension contributions, payments for vocational training or higher education. However, the total deductible amount is limited. The total amount of these deductible expenses is capped at 25% of the taxable income subject to 15%, 20%, and 32% PIT rates during the calendar year. Deductible life insurance premiums and pension contributions combined should not exceed €1,500 annually.
• Additional Deductions: Tax residents can deduct expenses related to building repair (excluding apartment renovations), car repair, and childcare for children under 18, up to €2,000 annually, if services are provided by registered Lithuanian taxpayers. This relief is applicable to 2019, 2020, and 2021.

Reporting and Deadlines

• Annual Income Declaration: Employees with additional income sources (other than standard employment) must submit an annual tax return by May 1st of the following year.
• Payroll Tax Report: Employers must file a monthly payroll tax report by the 15th of the following month, and an annual report by February 15th.

It is important to note that this information is current as of February 5, 2025, and may be subject to change. Consulting with a tax advisor is recommended for personalized guidance.