Lithuanian government approves 114-euro minimum wage rise
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On Wednesday, Lithuania’s cabinet of ministers decided to increase the minimum monthly wage by 114 euros, to 1,038 before tax. Next year, minimum wage earners will see their disposable income rise to around 777 euros a month, up by 69 euros.
The minimum hourly wage will also be set at 6.35 euros, 70 cents higher than today.
According to data from the national social insurance fund, Sodra, in the second quarter of this year, wages in Lithuania grew by 9.4 percent year-on-year.
According to preliminary estimates by the Ministry of Social Security and Labour, the minimum wage will exceed the poverty line next year.
“Applying the 2024 maximum tax-free income level, the after-tax income of minimum wage earners would rise by 69 euros next year to 777 euros, which is higher than the preliminary forecast of the 2025 poverty risk threshold (732),” said the letter to the government chancellery.
The proposed minimum monthly wage (MMA) in Lithuania is based on a formula agreed in 2017 that the ratio of the MMA to the average wage (AMW) should be between 45 percent and 50 percent.
The minimum wage in Lithuania is usually negotiated in the Tripartite Council that includes representatives of employers, trade unions, and the government. However, this time it has failed to come to an agreement. Trade unions proposed raising the MMA to 1,070 euros (up by 15.8 percent), while employers’ representatives called for a gradual increase by 10 percent to 1,016 euros from 2025.
The Ministry of Finance estimates that the increase in the MMA approved by the government will require around 44 million euros from the state budget.
According to data from Sodra, in May there were about 100,000 workers in Lithuania earning the MMA or below. Of these, about 13,000 worked in the public sector.
