More earnings “on paper” after New Year, but confusion looms

The new tax reform will come into power from January 1, 2019. This includes changes to the financial expression of wages, albeit in many cases this will only lead to a gross wage increase. Vilnius University Department of Law lecturer, lawyer dr. Vida Petrylaitė notes that the new changes could lead to confusion because the changes are coming into power all at once, writes.

The jurist reminds that wages will grow "on paper", however this illusion should not conceal that net wages will see no real change. While employers have been asked to multiply agreed wages by 1.289, leading to increased gross wages, due to taxation changes there will be no changes in net wage.

The only exception to this could be related to changes in the untaxed income size for employees, who use second stage pension savings, depending on their choices, V. Petrylaitė points out.

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