Baltic minimum wage increases

Latvia and Lithuania have announced upcoming increases to their respective minimum wages.

In Latvia, the minimum wage is scheduled to rise from 780 euros to 820 euros next year. This 40-euro increase is lower than the 835 euros suggested by the standard calculation formula, which ties the minimum wage to 46% of the average national wage. The Ministry of Welfare proposed the 820-euro figure after the National Tripartite Cooperation Council failed to reach an agreement on the higher target. Finance Minister Māris Kučinskis attributed the deviation from previous gradual increase agreements to a “complex current economic situation.”

While the proposal has received support from government officials, employers, and trade unions, concerns persist. Andris Bite, president of the Latvian Confederation of Employers, noted that the impact would likely be felt by municipal and public sector budgets rather than private employers. There are also concerns regarding the potential narrowing of the pay gap between minimum wage earners and qualified workers. Trade unions have suggested a compromise that includes simultaneous increases to the tax-free minimum, which is currently 570 euros.

In Lithuania, the gross monthly minimum wage is set to increase by 92 euros to 1,245 euros, effective January 1, 2027. This adjustment is expected to affect approximately 140,000 employees. After taxes, the estimated net increase in monthly take-home pay is approximately 56 euros, bringing the total net amount to roughly 902 euros.