Your Guide to Hiring Employees and Contractors in Lithuania
Capital city
Vilnius
Currency
Euro
Language(s)
Lithuanian
Ease of doing business
Very easy
Payroll frequency
Monthly
Employer taxes
1.77%
Payroll
Payroll Cycle
The payroll frequency in Lithuania is typically monthly. An employer must make the payment of salaries by the 10th of the following month.
Minimum Wage Requirements
National minimum wage is 730 EUR per month.
Individual Income Tax
The individual income tax is either 20% or 32% and is calculated using a flat rate.
The 20% income tax rate is applied to income amounts below EUR 81,162 (60 average wages) per calendar year in 2021 and at a 32% income tax rate for those exceeding EUR 81,162 per calendar year in 2021.
Employer Cost
The employer cost is generally estimated at 1.77% of the employee salary.
- Unemployment social security: 1.31%
- Payments to fund: 0.16%
- Contribution to the long-term employment fund: 0.16%
- Social insurance against accidents at work and occupational diseases: 0.14%
- social security contributions: 19.50 – 22.5%
- personal income tax: 20% or 32%*
- The 32% personal income tax rate in Lithuania is applicable only to employment income exceeding an annual salary of EUR 81,162.
- pension insurance: 8.72%
- additional pension insurance (optional): 2.4% – 3%
- health insurance: 6.98%
- sickness social security: 2.09%
Working Hours
Work Week
Monday to Friday.
Overtime Pay & Maximum Hours
- Standard working hours are 8 hours per day, 40 hours per week.
- Maximum 12 hours per day (including overtime).
- Overtime paid at 150% regular pay or 200% between 10.00 pm to 6.00 am.
Employment Termination
Employers can terminate a fixed term contract for the following reasons – business, personal or worker’s misconduct.
If the reason is misconduct, a warning must be given to the employee.
Notice period
The Standard notice period is 30 days for all employees with a minimum of one years’ service.
For employees with less than 1 year of service, the notice period is two weeks.
Probation periods
Standard practice is a probation period of 3 months. It is not mandatory.