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In 2021, the minimum wage, which is paid only for unskilled work, will go from 607 to 642 euros “on paper.” “In hands” would mean a salary increase from 447 to 467 euros.
According to Sodra, there are almost 138 thousand people in Lithuania. employees earning up to € 607 per month.
Different from Europeans sometimes
Increasing MMA is important not just for those with unskilled jobs. They also measure the salaries of employees in other professions (for example, doctors). Closely related to MMA are many of the 76,000. salaries of heavy drivers.
Income tax and Sodra contributions do not have to be paid for daily allowances paid to displaced workers (mainly drivers) if their salary is equal to or greater than 1.65 MMA.
Thus, the official salary of at least a part of the drivers, excluding allowances, will now start at 1059.30 euros before tax (an increase of 58 euros compared to the previous amount). In the hands of it would be a little more than 700 euros.
Whatever amount is paid to drivers in the form of allowances, their pension will be calculated on the basis of that amount when they reach old age.
According to Sodra, there are almost 160 thousand people in Lithuania. employees whose monthly income does not exceed the MMA.
Even with the increase in MMA, it will still be several times lower in Lithuania than in many of the former European Union countries. For example, in Luxembourg last year it was 2,242 euros, in Ireland – 1707 euros, in the Netherlands – 1,680 euros, in Belgium – 1,626 euros, according to Eurostat.
It is true that in Bulgaria, Romania, Poland, Latvia and some other Eastern European countries, the paper minimum is lower than in Lithuania.
Uncertain coronavirus situation
Danas Arlauskas, president of the Lithuanian Employers’ Confederation, said the decision to increase the MMA was hasty and irresponsible.
“We suggest that the Government wait longer and evaluate the economic situation of the country more closely. We ask that it be taken into account that not all sectors (restaurants, hotels, transportation) really recovered from the coronavir pandemic. Therefore, it is worth clarifying what to do for employers in these sectors. The most affected sectors have nothing to increase the MMA, “explained the employer representative.
Inga Ruginienė, president of the Lithuanian Trade Union Confederation, assured that there are no objective reasons to postpone the increase of the MMA, since the Ministry of Finance and other indicators allow to increase it.
The workers’ representative said that not a year had passed before she heard complaints from employers.
Employers were also reluctant to raise wages last year, when the Lithuanian economy was probably going through the best of times. So even the current discontent of entrepreneurs is like a cereal. We hear the same thing every year. And people are expecting higher wages as prices go up. Obviously, MMA is enough to survive, not to live. Our MMA hasn’t even reached the European standard yet, ”noted I. Ruginienė.
Contributions to the self-employed will increase
The increase in MMA next year will change the levels of some of the related contributions for the freelancers.
Residents working with an individual activity certificate, business license, members of small communities or owners of sole proprietorships, family members must pay the contributions to state social security (VSD) and compulsory health insurance (PSD) themselves to receive sickness benefit, as well as maternity, paternity. , childcare, retirement or free health care benefits.
The PSD tax rate is 6.98 percent. and is calculated on the basis of the minimum wage. In 2021, the monthly minimum wage will reach 642 euros. After the approval of these changes, as of January 1, the self-employed and residents who pay for health insurance themselves must transfer 44.81 euros to Sodra every month. This year, the minimum monthly contribution to PSD was € 42.37.
If a self-employed person earns more than the minimum wage, they must pay the difference of the € 44.81 they pay monthly, declaring income for 2021.
Changes in social security contributions for people with business licenses are also related to changes in the monthly minimum wage. Residents who carry out business license activities pay 8.72 percent. of MMA social security pension contributions. In 2021, the SSD contribution for a full-month company license will reach € 55.98 if the person does not accumulate additional pension.
All the self-employed have a maximum limit of 43 median earnings (VMU) on which contributions are calculated. In 2021, the average salary for the calculation of the contribution base will be 1,352.7 euros, so the maximum amount from which contributions are calculated will increase, which will reach 58,166.10 euros.
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