Changes to Per Diem and Business Trip Rules From October 2026

Lithuanian businesses are facing significant changes regarding the reimbursement of business trip expenses. Effective October 1, 2026, Government Resolution No. 518 introduces substantial amendments to the payment of per diems and other travel allowances. While these changes aim to resolve previous legal disputes, they require immediate review of internal company documents and accounting processes.

One of the most notable updates is the elimination of the vague "objective criteria" requirement for reducing daily allowances, a clause that historically led to numerous legal disputes. Starting October 2026, clearer thresholds will apply. For companies with a collective agreement in place, per diems can be reduced, but the rate cannot fall below 50% of the maximum amount set by the Government.

For companies operating without a collective agreement and relying on internal normative acts, the rules are becoming stricter. In such cases, per diems can only be reduced if the business trip lasts for at least 7 days, and the reduced rate cannot be less than 65% of the maximum allowance. Importantly, employers are legally obligated to inform employees in writing about any reduced per diem rates before the business trip begins.

The compensation for short business trips is also undergoing major adjustments. As of October 1, 2026, daily allowances will no longer be paid for one-day business trips within the territory of the Republic of Lithuania. Furthermore, for longer trips, if the first or last day of the journey lasts less than 4 hours, the allowance for that specific day will be reduced to 20% of the standard per diem rate.

How should companies and accounting professionals prepare for these regulatory changes? First, it is crucial to review and update internal travel policies and normative acts before the effective date. Without a collective agreement, the unilateral reduction of per diems for trips shorter than 7 days will no longer be permitted. Secondly, accounting and time-tracking software settings must be adjusted. Systems should be configured to prevent automatic per diem calculations for single-day trips in Lithuania and to accurately apply the 20% rate for short departures or arrivals.