Not everyone will feel the increase in wages: you may have to wait until next year

As spokesperson Antanas Bubnelis informed the presidencies, the president has already signed this law. The amendments to the law went into effect on July 1 of this year. and power until 2020. December 31 € 50 higher – € 400 NPD would apply for all 2020. Previously, such increase was planned from 2021 onwards.

Daiva Čibirienė, president of the Lithuanian Association of Accountants and Auditors, and Inga Ruginienė, president of the Lithuanian Trade Union Confederation, said it is better when the NPD is not applied immediately, then the overpayment of taxes returns next year when the income of the State Tax Inspection is declared. However, some need this pay raise right away, so they should speak to their employer.

Those who earn less will feel more

D. Čibirienė said the association advised all accountants to change the formulas of the salary calculation programs and apply the new NPD to the calculation of June salaries, because if the law takes effect on July 1 and wages June paid after June 30, are already required to apply the new NPD.

“And if the law takes effect on July 1 and we are talking about wages from the previous period, they are left with the opportunity to recalculate the NPD applied earlier. If 350 NPDs have been previously applied, the employer and employee agree, then the NPD will be recalculated from the beginning of the year.

For accountants, this means scrapping the entire year of work related to calculating wages. We are working again: we are recalculating the GPM, we are completing the GPM statements, we are distributing new salary spreadsheets to employees, because there are different amounts paid, we calculate the debt and we pay it, “he said.

Mr Čibirienė clarified that if the salary of at least one employee is recalculated, it will also be necessary to recalculate for older periods, because the Labor Code establishes non-discrimination.

“If an employer comes up with a recalculation of NPD for just one, it’s really wrong and everyone will have to recalculate,” he said.

As the accountant’s representative pointed out, some employees may learn of this change only after receiving their first salary.

“Those with the lowest income will feel more, those who earn the minimum wage will receive 10 euros more if they are covered by the NPD. If a person earns 2,700 euros in paper per month, its effect will be 5 euros per year,” he calculates. D. Čibirienė.

Delfi calculated that an employee who receives about 800 euros “in their hands” would receive a supplement of 9 euros due to the increase in NPD, earning MMA – 10 euros and earning 1,200 euros – almost 8 Eur.

Surprises when declaring income

I. Ruginienė recalled that even before signing the contracts in 2019. in late or 2020. At the beginning of the year, it was recommended that the NPD not be applied immediately.

“It should be understood that not all employees have the education of an economist or accountant, not everyone understands how those calculations are made. At the beginning of the year, we advised everyone not to write an application for the NPD and a number of employees and to until today they have a situation where they are simply not covered by the NPD. At the end of the year when they file the return they will receive a portion of the STI. Only when you file will you see that there is some difference in that you paid more taxes than the ones you actually had and that the tax credit will reimburse you for.

Therefore, workers who signed up to be exempt from NPD need do nothing and will return that money when they file a return next year.

It is a more complicated situation for those who wrote at the beginning of the year because they had to write an application so that they were covered by the NPD, ”said I. Ruginienė.

Mr Čibirienė recalled that a significant part of the employees had not been able to work this year, so the calculations due to excessive payments of taxes and arrears can be extremely complicated.

“Many people this year had certificates of disability and received child care benefits, and so on. These benefits were paid at 15 percent. GPM. At the end of the year, this means that there will be new calculations and they may have to pay GPM, although if they had worked normally they would not have needed it, precisely due to the distribution of NPD among the income.

There is no such spreadsheet on the Internet that allows you to discard your total income, which is taxed at different rates, since labor income is taxed at 20 percent. rate, sickness, disability benefits – 15%, and NPD is the same during the month, at the end of the year it is distributed according to the proportion of sickness benefits in the total boiler. In the process, unless you have to guess how much you will get at the end of the year on paper, you will see the actual image. I think this mission is impossible.

A word of advice, maybe it’s better not to recalculate so as not to have unpleasant surprises, because there are probably many people who have had many benefits due to illness this year and who may already have an impact. Tip: do not apply it to NPD “, – D. Čibirienė spoke on the program.

For those with the lowest incomes, it is recommended that NPD apply immediately.

The program noted that NPD has increased because people now get more money to spend on consumption, but without NPD, that money will only come to them next year.

“If a person works in the same job and has a stable salary, it is always the same, he has no problem applying the NPD from the first day and writing an application, there will be no problems. But difficulties arise when a person works in various jobs If that job is not permanent, with a constant salary, then there may be some unpleasant situations among the later calculations when you make the statement.

Our members have really debated and voted on whether it’s better to have a few euros of salary once in a while and then get a statement maybe even less when you have to pay at the end of the year, or not to get it now, but to get that benefit a year after. It is what many have argued that it is better to have an advantage at the end of the year rather than a disadvantage.

Later, when we had the debate, many people expressed such frustration that it was like putting money in the bank, freezing it and not being able to take it out. The employee is in a certain trap, as if encouraged to freeze and then retired, as if he had no choice, because otherwise, without calculating, he could still suffer at the end of the year, “said I. Ruginienė.

D. Čibirienė advises applying the NPD unless the employee earns a small salary and needs money here and now.

“If wages are high, these are companies where nobody applies NPD, but there are companies where wages are low and the employee accountant tells you if you may have accidentally forgotten the NPD request, if you want to know if you wrote it or not, and when a person discovers how much he will get more for the NPD application he says that I really need this money here and now because he lives from salary to salary and it is not enough for him. It is for him that increase of ten euros that now It owes to the increase in NPD, which earns MMA, that’s a lot. For those who have a lot of this advice: apply NPD because they need money here and now. They don’t need those savings at the end of the year, because they are already in debt, “he said D. Čibirienė.