Lithuania Approves 2027 Minimum Wage: STI Clarifies Tax-Free Per Diem Thresholds

Following Resolution No. 509 adopted by the Government of the Republic of Lithuania on July 1, 2026, which establishes updated minimum wage rates, the State Tax Inspectorate (STI) issued an official clarification No. (18.37-31-1 Mr) R-2156 on August 5, 2026, regarding the taxation of foreign travel per diems.

Effective January 1, 2027, the minimum monthly wage (MMA) increases from €1,153 to €1,245, while the minimum hourly rate (MVA) rises from €7.05 to €7.61. While the underlying statutory mechanism under Article 17, Part 1, Point 5 of the Law on Personal Income Tax (GPMĮ) remains unchanged, the rise in MMA shifts the salary thresholds calculated using the 1.65 statutory multiplier.

According to the STI clarification, as of January 1, 2027, statutory per diems for international business trips will remain entirely exempt from personal income tax (GPM) and social security (Sodra) contributions only if the employee's contractually agreed monthly salary is at least €2,054.25 (€1,245 × 1.65). For employees paid an hourly rate, the threshold increases to €12.5565 per hour (€7.61 × 1.65). During 2026, these thresholds stand at €1,902.45 and €11.6325, respectively.

If an employee's agreed base salary does not reach these amounts, a 50% cap takes effect: the total international per diems paid for the month are tax-exempt only up to 50% of the employee's contractually agreed salary. Any per diem amount exceeding this 50% ceiling is treated as employment-related income subject to the standard 20% personal income tax rate as well as full social security and mandatory health insurance contributions.

When applying the 1.65 multiplier rule, the benchmark is strictly the fixed salary or tariff rate specified in the employment agreement, rather than total variable compensation or discretionary bonuses accrued in a given month.

For businesses employing personnel with contract wages currently between €1,902.45 and €2,054.24, failing to increase their contracted pay to at least €2,054.25 (or €12.5565 per hour) by January 1, 2027, will trigger the 50% per diem tax ceiling. Payroll accounting systems must be updated to apply the €2,054.25 and €12.5565 thresholds for all calculation periods starting January 1, 2027.