Country Guides

Lithuania

Quick Find

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Capital

Vilnius

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Language

Lithuanian

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Remote workers

72,900

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Currency

€ Euro (EUR)

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Working hours

40 hours per week

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Public holidays

14 days per year

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Minimum monthly salary

€1,153

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Tax year

Jan 1 - Dec 31

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Date format

DD/MM/YYYY

Misclassification penalties

Fines between €868 and €5,792 per misclassification plus back pay of wages and contributions covering the period of misclassification.

Fun fact

Over 50% of the population speak more than two languages.

Employer contributions

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    Employment tax: 2.07% - 4.05%
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    Social security: 1.77% - 2.49%
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    Workers' compensation insurance: 0.14% - 1.4%
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    Long-term employment fund: 0.16%

Employee contributions

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    Employee tax: 26.98% - 54.5%
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    Social insurance: 19.5%, which includes contributions for pension, health insurance, sickness and motherhood

Income tax

Gross income: Up to €126,532

Tax rate: 20%

Gross income: More than €126,532

Tax rate: 32%

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Employer of Record in Lithuania

What is an EOR?

An Employer of Record is the legal employer of a worker in Lithuania. As such, the Employer of Record takes care of all Lithuania compliance aspects of employment, including payroll, taxes, statutory benefits, employment contracts and more.

EOR responsibilities

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    Ensuring their employment is compliant with local laws
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    Processing local payroll
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    Filing employment related taxes and returns
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    Issuing payslips to the employee
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    Distributing salary payments

How it works

  • Company

    Maintains a direct relationship with the employee, allocates them work tasks, and manages their performance.

  • Boundless

    Takes care of payroll, taxes, benefits, ensuring the employee and the company are compliant with all legal regulations.

  • Employee

    The third party to the agreement, the employee, fulfils all of their obligations as a worker for the company.

Statutory benefits in Lithuania

  • Health insurance

    All residents in Lithuania have access to the national health system, which is funded through mandatory contributions by employees (6.98%).

  • Education

    After five years of continuous employment, employees are entitled to at least half of their salary to be left for education leave (for formal or non-formal education) of up to ten working days per year.

Common non-mandatory benefits in Lithuania

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    Additional annual leave
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    Private health insurance
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    Top up to SODRA paid sick leave
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    Private pension plan
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    Work flexibility
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    Training & learning
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    Cash bonus
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    Stock options
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Written employment contract

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Payslip

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Remote work

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Health & safety

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Continuous training

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Contractual claims

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Unemployment funds

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Equal treatment & pay

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Protection against dismissal

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Pay transparency

Paid time off

20-25 days + public holidays

Paid sick leave

Length depends on reasons for taking it. Employers pay first two days, and the rest social security authorities

Maternity leave

18 weeks

Paternity leave

30 days

Parental leave

Up to 3 years, paid at different rates each year

Probation

Probationary periods are optional in Lithuania and cannot exceed three months.

Grievance and disciplinary procedures

Employees in Lithuania can be dismissed only after proper procedure: repeated misconduct with a prior warning, or immediately for a gross breach. Complaints must be filed within 1–3 months. If the employer mishandles the process, the employee may receive back pay, possible reinstatement, compensation, or severance of one monthly salary per two years (up to six).

Payment frequency

The payment frequency in Lithuania is monthly.

Payday

Typically, by the 10th of the following month. In any case, the payment has to be done no later than ten working days into the following month.

In Lithuania, companies must follow a standard procedure to properly dismiss an employee, which includes a grievance procedure, valid reason, notice and severance pay (if the employee is not at fault) according to tenure.

The most common and preferred termination procedure is by mutual agreement, which should be concluded in writing and detail the terms and conditions agreed by the parties. If the termination is not done in writing, the employer bears the burden of proof in the event of a dispute.

Termination must be documented and communicated in writing, including the length of the notice period to be served.

The Lithuanian Labour Code sets out the disciplinary procedure that companies must follow in regard to a dismissed employee.

FAQs

There are four main ways to hire in Lithuania. You can run payroll from your HQ for short-term arrangements, engage contractors for project-based work, set up a local entity to hire directly, or partner with an Employer of Record. Each option carries different compliance, cost, and administrative effort. An EOR is often used to hire in Lithuania without setting up a local entity.

Contractors work well when the relationship is project-based and the person serves multiple clients. If an individual gives their full and undivided attention to your company in Lithuania, employment is the right structure under Lithuanian law, covering entitlements like paid annual leave, sick leave, and social security contributions. For project-based contractor engagements, Boundless’s Agent of Record (AOR) service handles classification, contracts, and payments compliantly in Lithuania.

HR compliance in Lithuania means your policies and procedures respect all applicable Lithuanian employment laws and regulations. When you hire in Lithuania, this matters both to safeguard employee rights and to reduce employer risk. Compliance covers labour law, sick leave, annual leave (20-25 days), minimum wage (€1,153/month), tax credits, and a 40-hour working week. Following these is fundamental for running the business well.

An Employer of Record is the legal employer of the individual in Lithuania for government, tax, and employment purposes. It provides a locally compliant contract, runs payroll, files employment taxes, and manages statutory benefits such as 18 weeks of maternity leave and 20-25 days of annual leave. You remain responsible for sourcing workers, managing day-to-day work, and funding payroll each cycle.

Boundless partners with employment lawyers and advisers in each country we operate in, including Lithuania. They ensure employment contracts and onboarding documents comply with the local jurisdiction. We hold detailed discussions on specific norms such as payroll, social protection, data protection, notice periods, and work-from-home regulations. When a sensitive issue arises, our internal team engages the relevant firm promptly.

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