Payroll and Benefits Guide Lithuania
Last updated: May 09, 2023
Employer Payroll Contributions
Social Insurance (indefinite contracts)
Social Insurance (fixed contracts)
Total Employer Cost
Employee Payroll Contributions
|19.5%-26.48%||Total Employee Cost|
|19.50%||Social Insurance (up to ceiling of 90,246 EUR)|
|6.98%||Social Insurance (in excess of 90,246 EUR)|
Employee Income Tax
up to 101,094 EUR
Greater than 101,094 EUR
In Lithuania, the national minimum wage is 840 EUR per month.
MINIMUM WAGE (PER MONTH)
The payroll frequency in Lithuania is typically monthly. An employer must make the payment of salaries by the 10th of the following month.
13th-month payments are not required by law in Lithuania; however, it is common for employers to pay a performance-based bonus.
The standard working week in Lithuania consists of 40 hours, 8 hours per day.
All work above the standard 40 working hours per week is paid as overtime and regulated by the employment contract/collective agreement. An employee can work a maximum of 8 overtime hours over seven consecutive days. With written employee consent, the maximum can rise to 12 hours per seven consecutive days.
All overtime hours are paid at an overtime compensation rate: 150.00% of the employee’s regular pay rate.
If the overtime is performed at night between 10:00 pm and 6:00 am, the employee should receive compensation of 200.00%.
Paid Time Off
The annual leave entitlement in Lithuania is dependent on the employee’s years of service; standard entitlement is 20 working days of paid annual leave. One installment of leave must be at least 10 working days. Unused leave can be carried over.
Following the completion of 10 years of service with a single employer, the employee is entitled to an additional three days of paid leave. An additional day’s leave is accrued every five years after that.
There are 16 public holidays in Lithuania. The day before the public holiday, working hours are reduced by one hour (paid, but one hour shorter is indicated in the timesheet). Public holidays that fall on the weekend are usually lost.
In Lithuania, the employer is responsible for paying the first two days of illness at a benefit rate of between 62.06% to 100% at their own discretion and as specified in the employment contract. From the third day of illness, the employee will receive 62.06% of their regular salary figure paid by the National Social Insurance Fund (SODRA).
Sick pay is paid only for the working days.
Should an employee take incapacity for work absence to care for a patient, they will be entitled to a payment of 65.94% paid directly by SODRA.
Employees are entitled to 126 days of paid maternity leave, which is compensated by the social security if the employee is eligible. The maternity benefit is the equivalent of 77.58% of the employee’s standard rate of pay. The minimum maternity benefit per month cannot be less than 242 EUR (calculation based on six basic social insurance benefits valid for the last quarter before the right to maternity benefit commenced).
In the case of multiple or complicated births, an additional two weeks of leave is granted.
PAID MATERNITY LEAVE (DAYS)
Fathers/parents are entitled to 30 days of paid paternity leave which they must take in the first three months of the child’s birth, and can be split into up to two parts. If he is eligible, the father will receive the same social security benefits as the mother at 77.58% of their regular earnings.
Each parent will be able to take a two-month non-transferrable period of paid childcare (parental) leave. The remaining part of childcare (parental) leave can be shared among the parents according to the family’s needs. The non-transferable part of childcare leave can be taken either all at once or in parts, however, it cannot be taken by both parents at the same time.
Parental leave starts at the end of maternity leave, continues until the child turns one, and is paid at 77.58% of the employee’s salary. Parental leave can also be extended until the child turns two, at a pay rate of 54.31% for the first year and 31.02% for the second year. The third year is unpaid leave. Parental leave is paid by SODRA.
The partner of the birth mother in a same-sex couple is not eligible for parental leave. In the case of adoption, the maximum duration of parental leave is two years.
Mother & Father Childcare Leave
Parents are entitled to the following additional childcare leave:
- Employees raising one child under the age of 12 are entitled to 1 additional day off every 3 months or a reduction of 8 hours working time over three months.
- Employees raising a disabled child under the age of 18 are granted 1 additional day off per month or a reduction of 2 hours per week working time.
- Employees raising two children under the age of 12 are entitled to 1 additional day off per month or a reduction of 2 hours per week working time.
- Employees raising two children under the age of twelve, where one or both are disabled, are entitled to 2 additional days off per month or a reduction of 4 hours per week working time.
- Employees raising three or more children under 12 years of age are entitled to 2 additional days off per month or a reduction of 4 hours per week working time.
- Employees who do not have the right to the above additional days off, but who are raising a child under the age of fourteen, who is studying according to pre-school education, primary education or basic education programs, are entitled to at least half of the employees’ working days off work per year in the first academic year day of the year.
A request for leave must be submitted each time a worker intends to use the above leave. The first time this leave is occurring the employee must also submit the children’s birth certificates. If these days are not used within the allotted time period they are lost.
The above leave is paid based on the average salary.
Bereavement leave – employers must give employees three days of unpaid leave upon the death of a family member.
Notice of termination must be submitted in writing, indicating the reason for termination, the legal provision for the basis of the termination, and the date of termination.
Employers can terminate a fixed term contract for the following reasons – business, personal, or worker misconduct. It requires notice and a written explanation for the termination.
When dismissing for reasons of misconduct, a warning must be given and the employee must have an opportunity to explain their actions.
In Lithuania 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.
Employees with less than 5 years left until the statutory age of pension shall have the notice period doubled.
The notice period may also be subject to increase where the employee is raising a child under the age of 14, raising a disabled child under the age of 18, or for employees entitled to the retirement pension in 2 years.
An employee who has 12 months or less of service is entitled to half of the average monthly salary. For an employee who served more than one year and less than 20 years, the severance pay entitlement is two months. If an employee has completed 20 years of service, they are entitled to six months of salary. Severance pay is calculated based on the average salary figure.
Probation periods are not mandatory in Lithuania; however, standard practice is a probation period of 3 months.
Lithuania’s immigration system provides several options for employers of foreign nationals. Lithuania is a member of the European Union (EU) and the Schengen Area. Requirements, processing times, employment eligibility, and benefits for accompanying family members vary by permit type.
Business visitors to Lithuania typically use a local version of the Schengen C Visa, unless they are visa-exempt based on their nationality. The stay under Schengen Visa is limited to 90 days over a period of 180 days, counted cumulatively across the entire Schengen Area.
The main work authorization categories are the EU Intra-Company Transferee (ICT) Permit, suitable for transfers of managers, specialists, and trainees and issued for up to three years; and the EU Blue Card, ideal for highly skilled local hires and issued for up to three years.
The standard rate of VAT in Lithuania is 21.00%; there are exemptions with VAT reductions to 9.00%.
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Payroll contributions and personal income tax rates have been updated.
Questions & Answers
Payroll and Benefits Guide
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
Public Holidays Calendar
|Sunday||Jan-1||New Year's Day|
|Saturday||Mar-11||Independence Restoration Day|
|Wednesday||Nov-1||All Saint's Day|
|Thursday||Nov-2||All Saint's Day|
|Sunday||Dec-24||Christmas Day Eve|
|Tuesday||Dec-26||Second Day of Christmas|