• If you have registered an individual enterprise in the legal entity register, you are registered as a policyholder in the register of taxpayers. The State Tax Inspectorate transfers data to “Sodra”.
  • As the owner of an individual business you have the following compulsory insurance according to the order, provided for in the laws:
  1. Pension.
  2. Sickness (disease) insurance.
  3. Maternity social insurance.
  4. Unemployment social insurance.
  5. Compulsory health insurance.
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Providing notifications on a monthly basis:

An individual enterprise should provide a SAV notification regarding the self-employed persons to “Sodra” at the end of a calendar month, prior to the 15th day of the next month, whenever the owner of the individual enterprise takes out a sum of money, related to the employment relationships during a calendar month.

  For example: a notification regarding the payables transferred for January 2020 should be provided prior to 15 February 2020.

 

Providing notifications on an annual basis:

At the end of the calendar year, a SAV notification should be presented in the following cases:

  1. The individual enterprise did not provide SAV notifications on a monthly basis.
  2. The individual enterprise did provide SAV notifications on a monthly basis, however the data they provided does not correspond to the sum of annual income, declared to the State Tax Inspectorate under the Ministry of Economy as income related to working relations or relations compatible to the essence of working relations, excluding cases when the amount of funds, taken out for personal needs per calendar year (according to the SAV notifications, provided on a monthly basis), is larger than sum of funds taken out for personal needs, which is declared to the STI and the person does not request social insurance contribution return or accounting for future period. More information – www.vmi.lt.

 

Failure to provide a SAV notification or failure to provide the detailing the income for the last year according to months, will result in “Sodra” distributing contributions proportionally according to VMI data.

 

  You should provide a SAV notification not later than in 10 business days from the date on which the STI should be provided with the annual income declaration (May 1st of every year).

  A SAV notification should also be provided in case a self-employed person is exempted from paying the social insurance contributions for the first year from the start of the first activity, but still pays them.

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SD contributions rate:

  • 13,83 percent;
  • 15,63  percent if the person saves for a pension (1,8 percent);
  • 16,83  percent if the person saves for a pension (3 percent).

 

PSD contributions rate:

  • 6,98 percent from the minimal monthly salary (MMA). In 2019 - 38,74 Eur (555 Eur x 6,98 percent).

 

Contribution base (the sum payables are calculated from).

The individual enterprise owner’s social insurance contributions base consists of a 50 percent of total fundstaken out by the owner of the individual enterprise from the individual enterprise for his own personal needs, which is declared to the State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania as income related to working relations or relations compatible to the essence of working relations.

 

Annual Contributions cannot be calculated from a sum larger than a sum of 43 average salaries (hereinafter – VDU) – 48 856,60 Euro.

  • Maximum VSD contribution – 6 756,87 Euro;
  • Maximum VSD contribution – 7 636,29 Euro, if person saves for a pension (1,8 percent);
  • Maximum VSD contribution – 8 222,57 Euro, if person saves for a pension (3 percent);
  • Maximum PSD contribution – 3 410,19 Euro.

 

Annual PSD contributions cannot be calculated from a sum less than 12 minimal monthly salaries:

  • Minimal annual PSD contribution – 464,88 Euro.
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SD contributions rate:

  • 13,83 percent;
  • 15,93  percent if the person saves for a pension (2,1 percent);
  • 16,83  percent if the person saves for a pension (3 percent).

 

PSD contributions rate:

  • 6,98 percent from the minimal monthly salary (MMA). In 2020 - 42,37 Eur (607 Eur x 6,98 percent).

 

Contribution base (the sum payables are calculated from).

The individual enterprise owner’s social insurance contributions base consists of a 50 percent of total fundstaken out by the owner of the individual enterprise from the individual enterprise for his own personal needs, which is declared to the State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania as income related to working relations or relations compatible to the essence of working relations.

 

Annual Contributions cannot be calculated from a sum larger than a sum of 43 average salaries (hereinafter – VDU) – 53 380,20 Euro.

  • Maximum VSD contribution – 7 382,48 Euro;
  • Maximum VSD contribution – 8 503,47 Euro, if person saves for a pension (2,1 percent);
  • Maximum VSD contribution – 8 983,89 Euro, if person saves for a pension (3 percent);
  • Maximum PSD contribution – 3 725,94 Euro.

 

Annual PSD contributions cannot be calculated from a sum less than 12 minimal monthly salaries:

  • Minimal annual PSD contribution – 508,44 Euro.
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Both VSD and PSD contributions for the current month should be paid not later than up to the last day of that month.

  For example, you have to pay contributions for January 2020 until 31 January 2020.

Foreigners, who have temporary permission to live in Lithuania and are owners of an individual enterprise are highly recommended to pay compulsory health insurance contributions in advance. For example, contribution for the month of September must be paid until the 31st of August. This is important because compulsory health insurance is valid only if contributions for the current month are paid.

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Calculated contributions are paid into the “Sodra” payment collection accounts. When transferring money, pay attention to the procedure of creating payment orders.

It is mandatory to specify the payment code while transferring the payables. The payment can “get lost” and not accounted for if you do not provide the code - the payer will have a debt with interest calculated.

VSD payment codes:

  • Current contributions - 310.
  • Interest for late payments - 311.
  • Fines for unlawfully reduced contributions- 312.

 

PSD payment codes:

  • Current contributions - 322.
  • From the income received last year and payment of debts - 340.
  • Interest for late contributions - 341.
  • Fines - 342.
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Individual enterprise owners may not pay social insurance contributions for one year from the start of their first activity. The start of the first activity is the day the person becomes a self-employed person for the first time after 1 January 2020. PSD contributions should not be paid if the owner is already covered by compulsory health insurance.

 

In cases, funds are not taken out for personal needs:

  1. VSD contributions should not be paid.
  2. PSD contributions should not be paid if the owner is already insured by the compulsory health insurance.

 

In cases, the funds are taken out for personal needs:

VSD and PSD contributions should be paid with the exception of cases when the individual enterprise owner complies with at least one of the following conditions:

  • The owner is granted old-age or lost working capacity (disability) pension in Lithuania or any other European Union member state.
  • In case the owner has reached social insurance old-age pension age according to the Law on State social insurance pension (PSD contributions may not be paid if the owner is insured by compulsory health insurance).
  • In case the owner is at the place of imprisonment or has been assigned with measures of forced medical observation or educational remedy measures in a specialized mental health care institution.

  The period when the VSD contributions are not paid is not accounted at the social insurance record and the person is not accounted as insured by social insurance during that period.

 

I cannot pay contributions

You can postpone the payment of contributions. You need to:

  1. Provide an application to the “Sodra” department (the recovery of insurance contribution debt is stopped at the day you provide the request with all needed documents);
  2. A “Sodra” department will examine your application in 20 business days and will send you a notification with its decision. If postponing of the payment has been approved, you need to come to the “Sodra” department during a 10 business day period and conclude a debt payment postponement agreement.

 

  If your debt exceeds 1500 Euro, the decision is made in 3 business days from providing the application. The notification of the decision will be sent to you in 5 business after the decision has been made.

  In case your contribution debt payment is postponed, but you fail to execute the conditions of the agreement or fail to pay current payments, the agreement is terminated, the remaining debt is recovered and due interest is calculated.

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Self-employed persons who pay for social security contributions for themselves, on the payment of social security contributions up to a default payment of up to EUR 1 500, may apply to the “Sodra” section with the request to defer the payment of social security arrears. 
“Sodra” department shall, at the latest within 10 working days of receipt of the request, take a decision to defer or postpone the payment of the social security contributions. In this way, the payment of social security contributions may be delayed once per calendar year, subject to the following conditions: 

  • When social security contributions indebtedness is less than or equal to EUR 600, the social security contribution arrears are deferred to up to 4 months; 
  • In the case of social security contributions exceeding EUR 600 but less than or equal to EUR 900, up to a maximum of 6 months; 
  • In the case of social security contributions exceeding EUR 900 but less than or equal to EUR 1 200, up to a maximum of 8 months; 
  • When social security contributions indebtedness exceeds EUR 1 200, but is equal to or less than EUR 1 500, up to one year. 

The arrears of social security contributions start with repayment of the decision to defer payment of the social security arrears in accordance with the terms and conditions set out therein. The compartments shall inform the policyholder in writing of the decision taken within 5 working days of the decision. 
 
Persons may apply to the ‘Sodra’ department on deferral of contributions as soon as possible after the date on which the annual return declaration has to be submitted, i.e. after 1 May.

 

Important! Self-employed persons may not pay compulsory health insurance (CHI) contributions during an emergency and quarantine period and defer their payment for 2 years.

These persons who have not paid CHI contributions during an emergency declared by the Government and during quarantine will be required to pay these contributions for the said period within 2 years from the day of the emergency and quarantine cancellation.

If self-employed persons fail to pay CHI contributions within the set time limit when they have been provided with personal health care services within the set time limit, they will be required to compensate for the damage caused to the budget of the CHI Fund.

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Update date: 2020-04-16
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