Payroll and Benefits Guide - Lithuania

Lithuania
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Currency

Euro (EUR)
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Capital

Vilnius
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Employer Taxes

1.77%
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Date Format

dd/mm/yyyy
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Fiscal Year

1 Jan – 31 Dec

Fun Facts

Lithuania is one of the world’s greenest countries, with approximately 30% of its territory covered by forests.

Vilnius, Lithuania is known for its well-preserved Old Town and is often called the “Baroque capital of Eastern Europe”.

Lithuania is proud of its rich cultural heritage and is known for its traditional folk music, dance, and festivals.

Lithuanian is one of the oldest surviving Indo-European languages.

Lithuania is known for its amber, often called “Baltic gold”.

Basketball is the most popular sport in Lithuania.

Lithuania

Contributions

Employee Payroll Tax

Contribution TypeRate
Social Insurance19.50%
Social Insurance6.98%

Employer Payroll Tax

Contribution TypeRate
Social Insurance1.77%
Social Insurance2.49%

Payroll

Payroll Cycle

In Lithuania, payrolls are normally processed once each month. Payroll must be completed by the employer by the 10th of the following month.

13th Salary

Although there is no legal requirement for 13th-month payments in Lithuania, it is typical for businesses to provide employees a performance-based incentive.

Work Hours and Week

In Lithuania, a typical workweek consists of 40 hours, or eight hours every day.

Overtime

All labor performed in excess of the required 40 hours per week is compensated as overtime, as defined by the employment contract or collective bargaining agreement. Over the course of seven days, an employee is only permitted to work a total of 8 extra hours. The upper limit may be increased to 12 hours per week with the written approval of the employee.

All overtime hours are compensated at a rate of 150.00% of the employee’s normal hourly wage. The employee should be compensated 200.00% more for extra hours worked between 10:00 pm and 6:00 am.

Lithuania

Leave

Paid Time Off

Depending on the employee’s years of service, Lithuanian workers are generally entitled to 20 working days of paid yearly leave. The minimum length of a leave installment is ten working days. You can carry over unused leave.

The employee is entitled to an additional three days of paid leave if they have worked for a single firm for ten years. After then, one day of leave is added every five years.

Public Holidays

In Lithuania, there are 16 public holidays. Working hours are shortened by one hour the day before a holiday; this hour reduction is compensated but noted on the timesheet. On weekends, public holidays are typically lost.

Sick Days

In Lithuania, the employer must cover the first two days of an employee’s sickness at a benefit rate that ranges from 62.06% to 100%, depending on their discretion and the terms of the employment contract. The National Social Insurance Fund (SODRA) will pay the employee 62.06% of their usual wage starting on the third day of their sickness.

Only working days are covered by sick pay.

Employees who take time off from work due to illness or injury to care for a patient are eligible to a 65.94% reimbursement from SODRA.

Maternity Leave

Employees are entitled to 126 days of paid maternity leave, which, if they qualify, is covered by social security. The employee’s standard rate of pay is equal to 77.58% of the maternity benefit. The maternity benefit’s minimum cannot be less than 242 euros per month (calculated based on six basic social insurance benefits that were in effect for the final quarter preceding the maternity benefit’s start date).

An additional two weeks of leave are given in the event of numerous or problematic deliveries.

Paternity Leave

Parents and fathers are entitled to 30 days of paid paternity leave, which can be taken in up to two installments within the first three months following the birth of the child. The father will get the same social security payments as the mother at 77.58% of their respective regular wages if he is qualified.

Parental Leave

A two-month, non-transferable paid childcare (parental) leave will be available to each parent. Depending on the requirements of the family, the remaining childcare (parental) leave might be divided between the parents. Although the non-transferable portion of parental leave may be used in full or in segments, it cannot be used by both parents at the same time. Parental leave is compensated at 77.58% of the employee’s income and begins at the conclusion of maternity leave and lasts until the kid turns one. Until the kid reaches two, parental leave may be continued at a pay rate of 54.31% for the first year and 31.02% for the second. Three years are unpaid leave. SODRA pays for parental leave. In a same-sex partnership, the birth mother’s partner is not qualified for parental leave. The maximum amount of parental leave time for adoption is two years.

Termination

Termination Process

Written notice of termination is required, including the date of termination, the legal provision that serves as the basis for the termination, and the cause for termination.

A fixed-term contract may be terminated by the employer for any of the following reasons: business, personal, or employee misbehavior. It necessitates notification and a justification for the termination in writing.

An employee must be given a warning before being fired for misbehavior and be given the chance to defend their actions.

Notice Period

In Lithuania, all workers with a minimum of one year of service are subject to a 30-day standard notice period. The notice period for workers with less than a year of experience is two weeks.

The notice time will be increased for employees who still have less than five years until they reach the legal retirement age.

Additionally, the notice period may need to be extended in cases where the employee is caring for a kid under the age of 14, a child who is handicapped and is under the age of 18, or an employee who will be receiving a pension in two years.

Severance Pay

Half of the typical monthly compensation is due to an employee with 12 months or less of service. The employee is entitled to two months’ worth of severance compensation if they worked for the company for more than a year but less than 20 years. An employee is entitled to six months of salary after 20 years of service. The average wage data is used to compute severance pay.

Probation Period

Probation Period

Although they are not required, Lithuanian probationary periods typically last three months.

Immigration

Employers of foreign nationals have a number of alternatives under Lithuania’s immigration system. Both the European Union (EU) and the Schengen Area include Lithuania as a member. Each form of permit has different requirements, processing times, work eligibility, and perks for accompanying family members.

Unless they are visa-exempt due to their nationality, business travelers visiting Lithuania normally utilize a localized Schengen C Visa. The maximum stay permitted by a Schengen Visa is 90 days spread out over a total of 180 days, cumulatively over the whole Schengen Area.

The EU Intra-Company Transferee (ICT) Permit, appropriate for transfers of managers, specialists, and trainees, and issued for up to three years; and the EU Blue Card, appropriate for highly trained local employees, issued for up to three years, are the two primary kinds of work authorization.

VAT

In Lithuania, the regular VAT rate is 21.00%; however, there are exclusions that result in a VAT decrease of 9.00%.