Lithuanian lawmakers propose annual 13th salary incentive

Lithuanian lawmakers, led by Karolis Neimantas of the ‘Nemuno aušra’ faction, have proposed amendments to the Labor Code to introduce an annual incentive bonus, often referred to as a ‘13th salary’.

If approved by the Seimas, the bonus would be paid once a year in December or January. The amount would not exceed the employee's average monthly wage over the previous 12 months. To encourage this practice, employers would be exempt from additional taxes, and employees would not be subject to compulsory health or state social insurance contributions, provided the bonus does not exceed twice the average wage of the last quarter.

Proponents argue the measure aims to increase employee loyalty and motivation, ultimately leading to better business results. The proposal specifies that these bonuses are discretionary and do not create a legal obligation for employers to share company profits.