The minimum wage in Lithuania to rise by more than 12%
In 2025, the minimum wage in Lithuania will be €1,038. The government has approved changes that will increase the monthly rate by 12.3%. Compared to the current figures, this will mean an increase of €114. From the new year, the cost of an hour’s work will be around €6.4. At present, employers pay €5.7.
According to the minister responsible, Vytautas Šilinskas, the decision to raise wages was taken on the basis of economists’ recommendations. The wage increase is a step towards ensuring the stability of the working population. At the same time, the increase in the minimum wage is an optimal indicator of the conditions of the current development of the country’s market. It will not put pressure on the employment sector and will help to preserve jobs.
Reasons for the increase
The central bank had initially planned to raise the rate by 10%. However, analysts improved their forecasts for the Lithuanian economy, which made it possible to increase the payment by 12.3%.
The Lithuanian government systematically implemented the strategy of increasing wages, which was adopted in 2017. At that time, the authorities adopted a formula for calculating the percentage increase in the minimum wage. This method is still in use today, and it is contributing to reducing the income gap among the population and improving the living standards of the labour force.
Traditionally, the amount of the increase is negotiated by several parties. This approach minimises dissatisfaction among employers and their employees. This time, however, the parties were unable to reach a consensus:
1. The unions proposed an increase of 15.7%, which would have meant an increase to €1,070;
2. Business representatives disagreed, insisting on 10% to €1,016;
3. The central bank also proposed a 10% increase in the minimum wage in 2025 and a 10.5% increase in 2026.
Lengthy discussions failed to produce results, and the government then took it upon itself to approve the rate. The authorities stopped at 12.3%
Currently, the minimum wage in Lithuania is €924. This represents 45% of the average salary in the country.
It is important to note that the newly approved wage rate of €1038 is the amount before taxes. Both the new wage and the current one are tax-free. After all the deductions, workers will receive €777. Now it is 747 euros. According to official statistics, about 110 thousand people in Lithuania receive the minimum wage. This is about 9% of the country’s total working population.
In addition to raising the rate, the government also approved an increase in the number of staff working for budget organisations. An additional €53 million will have to be found to increase the number of employees in this sector. In 2026, this amount will increase by €55 million as salaries for the budget sector will increase.
