Rounding of Cash Payment Amounts: What You Need to Know?

Starting May 1, 2025, a new procedure for rounding cash payment amounts will take effect in Lithuania. This decision was made to reduce the use of small euro coins—1 and 2 cent coins—in everyday transactions. Although it will not affect product prices or the calculation of their value, many residents have questions about how these changes will be applied in practice.

Reasons for changes

The Bank of Lithuania, following EU recommendations and the experience of other countries, has decided to reduce the amount of small coins in circulation. It is believed that this change will have a positive impact on the economy and the environment, as well as simplify payment processes.

Currently, when paying in cash, 1 and 2 cent coins are used to give change, so retail locations accumulate them, and the Bank of Lithuania constantly mints or purchases additional coins from other countries.

Big spending – the production and distribution of coins cost more than the coins themselves.
Big resources – metals, energy, human resources, and logistics are required.
Irrational use of money – as much as two-thirds of the 1 and 2 cent coins put into circulation do not return to the Bank of Lithuania.

1 and 2 cent coins contribute to pollution not only because of their production process but also because they are often lost (not returned into circulation).

The goal of this decision is to make payments simpler and faster. Small coins will no longer be needed for change, which will speed up the cash payment process.

New rounding of cash payments

The rounding of cash payment amounts in Lithuania will be carried out in accordance with the Law on the Rounding of Cash Payment Amounts of the Republic of Lithuania

Starting May 1, when paying in cash, only the final total amount of the purchase will be rounded. This means that the prices of individual goods or services will not change, but the total amount of the shopping basket will be rounded according to the following rules:

the total amount payable ending in 1 or 2 cents will be rounded down to 0.
Example: 10,21 € - 10,20 €
the total amount payable ending in 3 or 4 will be rounded up to 5 cents.
Example: 5,94 € - 5,95 €
the total amount payable ending in 6 or 7 will be rouned down to 5 cents.
Example: 7,76 € - 7,75 €
the total amount payable ending 8 or 9 will be rounded up to 10 cents.
Example: 2,89 € - 2,90 €

Rounding is not applied when paying by bank card, bank transfer, or any other non-cash method.

Rounding is neutral for both the buyer and the seller. In some cases, the buyer will pay 1 or 2 cents less, in others – 1 or 2 cents more, but over the long term, the differences will balance out.

How does it affect customers and businesses?

The rounding of cash payment amounts is mandatory for all natural and legal persons who accept cash payments.

Rounding must be applied by individuals and legal entities accepting cash payments, including:

Retailers (shops, kiosks, gas stations, pharmacies, etc.)
Service providers (providers of medical and healthcare services, legal services, financial services, catering services, beauty services, entertainment and leisure services, etc.)
Public service providers (libraries, museums, swimming pools, public transport services, medical service providers, etc.)

Rounding applies to all cash payment amounts. The amounts are rounded:

When person purchases goods or services from a legal entity;
When person pays another natural person in cash;
When entity pays another legal entity in cash;
When a legal entity pays a person for goods or services.

Experience in Europe and other countries

Cash payment rounding has already been implemented in other eurozone countries, including the Netherlands, Belgium, Finland, Ireland, Italy, Slovakia, and Estonia. In these countries, small coins (1 and 2 cents) are no longer issued into circulation, and the final total of the shopping basket is rounded to the nearest 5 cents.

In eurozone countries where rounding is applied to cash payments, 1 and 2 cent coins remain legal tender. Residents can still use them for payments.

Application of Rounding Outside the Eurozone:

Not only in Europe but also in other parts of the world, increasing attention is being given to phasing out small coins. Countries such as Norway, Canada, and Australia also apply rounding when cash payments are made.

The experience of these countries shows that rounding is a practical solution that helps to:

Reduce the costs of cash circulation.
Make payments more convenient for both consumers and businesses.
Contribute to sustainability and reduce negative environmental impact.

If you have any questions in regard cash payment changes – Reach out!!