Lithuanian government approves a €114 increase in the minimum wage.
On Wednesday, Lithuania’s cabinet of ministers approved a €114 increase in the minimum monthly wage, raising it to €1,038 before tax. As a result, minimum wage earners will see their disposable income rise to around €777 per month next year, an increase of €69.
The minimum hourly wage will also be adjusted to €6.35, which is €0.70 higher than the current rate.
Data from the national social insurance fund, Sodra, indicates that wages in Lithuania grew by 9.4% year-on-year in the second quarter of this year.
Preliminary estimates by the Ministry of Social Security and Labour suggest that next year, the minimum wage will exceed the poverty line.
“Applying the 2024 maximum tax-free income level, the after-tax income of minimum wage earners would rise by €69 next year to €777, which is higher than the preliminary forecast of the 2025 poverty risk threshold (€732),” stated a letter to the government chancellery.
The proposed minimum monthly wage (MMA) in Lithuania is based on a formula established in 2017, which sets the ratio of the MMA to the average wage (AMW) between 45% and 50%.
Typically, the minimum wage in Lithuania is negotiated within the Tripartite Council, which includes representatives of employers, trade unions, and the government. However, an agreement was not reached this time. Trade unions proposed increasing the MMA to €1,070 (a 15.8% increase), while employer representatives suggested a gradual increase by 10% to €1,016, starting in 2025.
The Ministry of Finance estimates that the newly approved increase in the MMA will require approximately €44 million from the state budget.
According to Sodra, as of May, about 100,000 workers in Lithuania were earning the MMA or less, with around 13,000 of them employed in the public sector.