Lithunia Employer Social Charges

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20th June 2019

Lithunia Employer Social Charges

Employer Social Charges in Lithuania

Effective 1 January 2019 the Employer social charges in Lithuania have been reduced from 32% to 1.77%. The employee social charges have been raised and the salaries have been raised: so for existing employment the effect is ZERO. But over time the fact that the employer social charges has been lowered must be a great incentive for employment creation and may attract foreign employers..

I am old enough to remember a similar policy being implemented in 1990 in Netherlands. One of the social charges, the Overhevelingstoeslag was transferred to the employees from the employer, and the employee salaries were raised to compensate. .

I was at that time in a French company and responsible for HR costs and I was astonished at the rise in salaries. But once it was explained to me I could see that the overall costs did not rise. But for a while at least it meant that Netherlands employer social charges looked very attractive to potential employers. .

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