Hire and pay employees in
Lithuania, hassle-free

With Deel, your business can easily hire employees in Lithuania. No more worrying about local laws, complex tax systems, or managing international payroll. Deel takes care of everything in 150+ countries.

The average onboarding time frame in Lithuania is 2 days with Deel.

Currency

Euro (EUR)

Capital

Vilnius

Official Language

Lithuanian

Payroll Cycle

Monthly

Onboard, pay and manage employees in Lithuania with Deel.

Usually, to hire in Lithuania, your business needs an entity. That means a local office, an address registered as a subsidiary, and an account with a local bank. All of this, plus navigating regional benefits, payroll, tax, and HR laws, can take months.

Deel lets you hire employees in Lithuania quickly, easily, and compliantly. We even automate tax document collection, payroll, benefits, and more. For your existing direct employees, we can manage your entire payroll operation from end-to-end.

Download the Guide

All the necessary benefits for Lithuania
built right in

Deel allows you to provide localized benefits for employees in Lithuania within minutes. All in one manageable online dashboard.

  • Pension Insurance
  • Public Health Insurance
  • State Guarantee Fund
  • Unemployment Insurance
  • Work Accident Insurance
  • Private Healthcare - Unisure (optional)
  • Private Healthcare - Allianz (optional)

Our quickstart guide to hiring in Lithuania

Navigate the tabs below to learn everything you need to know about hiring an employee in Lithuania

Minimum Wage Requirements

The minimum gross monthly salary is EUR 924

Individual Income Tax

The individual income tax is either 20% or 32%. Income tax 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. 

Payroll 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%

These costs are provided as estimates and are intended solely for general informational purposes. To fully comprehend all associated costs and fees related to the terms of any employment agreement for this country, please contact our Sales team for a quote.

Overtime Pay & Maximum Hours

Overtime payment is mandatory. Hours outside of standard work hours are considered overtime. Employees can work a maximum of 48 hours of overtime per week. Employees can work a maximum of 180 hours of overtime per year. For additional hours, employees are paid 1.5 times their regular salary. 

Standard working hours are eight hours per day, 40 hours per week. The standard workweek is from Monday to Friday. 

Maternity Leave

Pregnant employees who have maternity social insurance records of at least 12 of the previous 24 months are entitled to 126 days of paid leave. 70 days must be taken before the child's birth. The remaining 56 days must be taken after the child's birth. The employee will receive 77.58% of the salary during this period, and State Social Insurance Fund Board will be responsible for this pay. 

In the event of birth complications or multiple births, the employee can extend leave for an additional 14 paid days.

Paternity Leave

Employees who have fulfilled the conditions to be eligible for paternity leave (conditions stated below) are entitled to 30 days of paid paternity leave. The employee will receive 77.58% of the salary during this period, and State Social Insurance Fund Board will be responsible for this pay. 

Conditions to be eligible for paid paternity leave:
  • An employee that has been ensured
  • An employee that has been granted a paternity leave according to the procedure established by law
  • Employees who, over the last 24 months before the first day of paternity leave, have got not less than 12 months of the social insurance record

Parental Leave

Childcare Benefit is a benefit paid to one of the parents (adoptive parent), one of the grandparents, or guardian caring for the child.

It is calculated in relation to earnings and depends on the time scale chosen:
  • Employee insured elects to receive an allowance up until the child is one year old - 77.58% of the salary
  • Employee elects to receive an allowance up until the child is two years old - 54.31% of salary for the first year, and 31.03% of the salary for the second year
  • In the event of multiple births, the allowance varies with the number of children born, but the maximum is 77.58% of the salary
The State Social Insurance Fund Board will be responsible for this pay. 

During the adoption of a child, childcare benefit is paid 12 or 24 months, optionally, regardless of the age of the adopted child and until the child reaches the age of 18. The amount is 77.58% of the salary if the benefit is received for one year and 54.31% for two years.

The State Social Insurance Fund Board will be responsible for this pay.

Sick Leave

There is no maximum number of days for sick leave. The first three days are paid by the employer, where employees receive 62.06% of their salary. After three days, employees receive 62.06% of their salary which is paid by the State Social Insurance Fund Board. 

Leave taken to attend to a sick family member or child is paid from the first day onwards. Employees receive 65.94% of their salary during this leave. State Social Insurance Fund Board is responsible for this payment.

 Employees qualify for sickness benefits if they:
  • Become temporarily incapacitated
  • Are covered for sickness through social insurance
  • Are absent from work and loses earnings because of illness
  • Are insured and have a sickness social insurance record of at least three months in the previous 12 months, or six months in the previous 24 months
  • Do not have the required sickness social insurance record because of studying up to the age of 26 or being in professional military service or a statutory civil servant
  • Have submitted an application for benefits to the regional State Social Insurance Fund Board office not later than 12 months after the end of the illness

Termination Requirements

Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.

Compliant terminations include:

  • Voluntarily by the employee
  • By mutual agreement
  • Unilaterally by the employer based on valid reasons or without any reason
    Probation period
    Objective grounds
    Disciplinary dismissal
    Performance due to unsuitability for the job
    Job function become superfluous due to change in organization structure

Notice Period

Notice will depend on the reason for termination and length of employment.

Termination of employment at the initiative of an employer through no fault of an employee:

  • Standard notice: one month of notice period
  • Less than one year of employment: two weeks notice
  • Above notice periods are multiplied by three for:
    Employees raising a minor (also adopted) under the age of 14
    Employees raising a disabled child under the age of 18
    Disabled employees
    Employees who will be entitled to a retirement pension in two years
Termination of an employment contract at the will of the employer:
  • Notice period of three days given to the employee
  • Pregnant women, employees who are on maternity, paternity, or childcare leave cannot be dismissed on this legal basis

Termination of an employment contract on the initiative of the employee without a valid reason:
Employee has to submit a written resignation with notice of minimum of 20 days

Termination of an employment contract on the initiative of the employee for valid reasons:
  • Employee cannot set a shorter notice period for the employer
  • The Labor Code enables the employer and the employee to agree that the employee will not work during the notice period, but will be paid for the entire notice period

Severance for Employees

Severance pay will depend on the reason for termination and length of employment.
  
Termination of employment at the initiative of an employer through no fault of an employee:
  • If the length of employment is above one year - two average monthly salaries
  • If the length of employment is less than one year - 0.5 average monthly salary
  • Additionally, the dismissed employee receives severance pay from a special state fund. The amount depends on the continuous duration of employment

Termination of an employment contract at the will of the employer:
  • Minimum six average monthly salaries

Termination of an employment contract on the initiative of the employee for valid reasons:
  • If the length of employment is above one year - two times the average remuneration
  • If the length of employment is less than one year - one average remuneration

To protect you from unforeseen financial risks arising from terminations, Deel applies a Severance Accrual to all employment agreements in this country.  Deel has extensive expertise in managing litigation risk globally and our Severance Accrual calculation is based on the prevailing common-law or statutory entitlements and local best practices. In the event your employee resigns or is not entitled to severance, all unused amounts will be returned to you.

Paid Time Off

Full-time employees working five days a week are entitled to 20 days of paid time off (PTO) a year, while full-time employees working 6 days a week are entitled to 24 days of paid time off (PTO) a year. Part-time employees are entitled to 20 days pro-rata. PTO accrues monthly with 1.67 days per month. 

For the first year of employment, all annual leaves are normally granted after at least half of the number of working days per working year. At the request of an employee, less than six months of uninterrupted work shall be granted annual leave for:
1) Pregnant workers before or after maternity leave
2) Employees during their child's maternity leave, before or after paternity leave
3) With the permission of the employer

Public Holidays

Lithuania celebrates 15 national holidays. National public holidays include: 

  1. New Year's Day
  2. Day of Restoration of the Lithuanian State 
  3. Lithuanian Independence Restoration Day 
  4. Easter Sunday
  5. Easter Monday 
  6. Labour Day
  7. Mother's Day 
  8. Father's Day
  9. St. John’s day
  10. Statehood day
  11. Assumption Day
  12. All Saints' Day
  13. All Souls Day 
  14. Christmas Eve
  15. Christmas Day

Onboarding

Onboarding takes 2 business days.

Employment Contract Details

Contracts must be in Lithuanian and can be bilingual with English. They must be in writing and signed by both parties. 

A contract must include: 
  • Name
  • Start date
  • Length of the employment
  • Probation period
  • Working hours
  • Annual leave
  • Job description
  • Termination conditions

Contract Backdating is not allowed.

Probation Period

Employees hired using Deel have a probation period of 90 days, this cannot be extended as it is the country maximum. As of January 2022, it's Deel company policy to include probation periods in all employment contracts moving forward.

Probation periods help an employer and the employee ensure they're a hiring match, allowing a company to quickly decide if it's a fit or the employee to see if the job aligns with their career goals.
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Hiring in Lithuania, hassle-free

With Deel, your business can easily hire employees in Lithuania with our EOR solution. If you have an entity, our Global Payroll solution takes care of payroll and compliance for your direct employees. Our 250+ in-house experts handle everything from managing local laws, complex tax systems, or your payroll in Lithuania and 150+ countries.

Group (8)

Starting at 599 USD

Management fee

Group (9)

1.77%

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*of employee salary

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