NPD 2026 in Lithuania is an important topic for employees because the non-taxable income amount determines how much personal income tax is paid and how much salary remains after taxes.
The larger the NPD applied to your salary, the smaller the part of your income that is taxed. As a result, employees receive a higher net salary.
What is NPD
NPD stands for non-taxable income amount. It is the portion of a person’s salary that is not subject to personal income tax.
This means that a part of the salary is effectively tax-free, allowing employees to keep more money after taxes.
NPD amount in 2026
In 2026, the standard monthly NPD is €747 for employees whose monthly income does not exceed €1,038. This threshold equals the minimum monthly wage in force for 2025 (the reference year used in the 2026 formula).
| Monthly income | NPD applied | Explanation |
|---|---|---|
| Up to €1,038 | €747 | Full NPD applied |
| €1,038 – €2,864 | Reduced NPD | NPD = 747 – 0.49 × (income – 1,038) |
| €2,864.22 or more | €0 | NPD no longer applies |
This means that people earning the minimum wage receive the full NPD, while higher salaries gradually reduce the amount.
How NPD is calculated in 2026
If monthly income exceeds €1,038, the following formula is used:
NPD = 747 – 0.49 × (monthly income – 1,038)
| Gross salary | Calculation | NPD |
|---|---|---|
| €1,038 | Income does not exceed threshold | €747 |
| €1,153 (min. wage) | 747 – 0.49 × (1153 – 1038) | €690.65 |
| €1,300 | 747 – 0.49 × (1,300 – 1,038) | €618.62 |
| €1,500 | 747 – 0.49 × (1500 – 1038) | €520.62 |
| €2,000 | 747 – 0.49 × (2000 – 1038) | €275.62 |
How NPD affects your take-home salary
NPD directly influences how much salary an employee receives after taxes. A larger NPD means a smaller taxable income, which reduces the amount of personal income tax paid.
However, the final take-home salary also depends on other factors such as social insurance contributions and pension payments.
When NPD stops applying
NPD gradually decreases as income increases.
Who should pay attention to NPD
- Employees who want to understand their net salary
- People comparing gross and net income
- Employers calculating payroll
- Anyone interested in the Lithuanian tax system
How NPD affects your take-home pay: worked example
Here is how NPD reduces your income tax at the 2026 minimum wage of €1,153 gross/month:
| Step | Calculation | Amount |
|---|---|---|
| Gross salary | — | €1,153.00 |
| Social insurance (19.5%) | 1153 × 0.195 | −€224.84 |
| NPD (tax-exempt amount) | 747 − 0.49 × (1153 − 1038) | −€690.65 |
| Taxable base for GPM | 1153 − 224.84 − 690.65 | €237.51 |
| Income tax GPM (20%) | 237.51 × 0.20 | −€47.50 |
| Net take-home pay | 1153 − 224.84 − 47.50 | ≈ €880.66 |
Without NPD, GPM would be calculated on €928.16 (1153 − 224.84), giving a tax of €185.63 — more than three times higher. NPD saves this employee €138.13 per month in income tax.
Enhanced NPD rates for special categories
In addition to the standard NPD, Lithuania applies enhanced NPD rates for certain groups in 2026:
- Persons with severe or moderate disability: fixed NPD of €1,494/month (double the standard amount), regardless of income level.
- Parents raising children under 18 (or disabled children): additional child NPD comes into effect from 2027 tax year.
These enhanced rates are calculated automatically by employers based on information provided by the employee.
NPD and the Lithuanian salary calculator
The easiest way to see exactly how NPD affects your specific salary is to use the Lithuanian salary calculator (2026). Enter your gross salary and the calculator instantly shows your NPD, GPM, social contributions, and net take-home pay.
For context on related topics, see also:
- Minimum wage in Lithuania 2026 – the €1,153 gross figure, net pay breakdown, and hourly rates.
- Lithuania tax reform 2026 – all GPM, NPD, and MMA changes in one article.
FAQ about NPD 2026
What is NPD?
NPD is the non-taxable income amount that reduces the taxable portion of salary.
What is the NPD amount in Lithuania in 2026?
When monthly income reaches approximately €2,864, the NPD effectively becomes zeroHow is NPD calculated?
The monthly NPD is €747 for employees earning up to €1,038.
Does everyone receive the same NPD?
No. NPD depends on income and decreases as salary increases.
At what salary does NPD disappear?
If income exceeds €1,038, the formula is used: NPD = 747 – 0.49 × (income – 1,038). The full NPD threshold of €1,038 corresponds to the 2025 minimum monthly wage used in the 2026 formula.
Source: Lithuanian tax authority guidelines.