lithuania

Lithuania

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Minimum wage

What are the minimum wage requirements?

In October 2021, the Lithuanian government agreed to a proposal to increase the country’s minimum monthly salary by almost 14% – from €642 to €730.

Contributions & Taxes

How much are the contributions & taxes?

The state respectively adds the contribution of 1.2% on the state average remuneration amount, which will increase up to 1.5% in 2023. Such individuals are also able to choose to contribute at the highest rate of 3% (with a subsidy of the state at 1.5%) from the beginning of enrolment to such a system.

Employer

The employment income is taxed by applying a 20% PIT rate (15% PIT rate is applicable for sickness pay). However, if in 2021 employment income exceeds 60 average monthly salaries, i.e. EUR 81.162, higher 32% PIT rate is applicable for exceeding amounts.

Corporate

The standard CIT rate is 15%. However, small companies and agricultural companies can apply a reduced CIT rate of 0% or 5% if certain conditions are met.

Employee

n Lithuania, employees must pay two rates of income tax related to employment, depending on their gross income. If the income does not exceed 60 average salaries annually (for 2021 – €81,162), there is a flat rate of 20%. For any amount exceeding this threshold, a progressive rate of 32% is applicable.

Income Tax

There is an income tax threshold (Lithuanian: Neapmokestinamasis pajamų dydis or NPD). Basic tax rate for income from employment is 20% and the higher rate is 32%. Income from dividends is taxed at a rate of 15%. Tax rate varies for other types of income.

Payroll

What is the 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.

Is there 13th salary in Lithuania?

13th-month payments are not required by law in Lithuania, however, it is common for employers to pay a performance-based bonus.

Labor Rules

The standard working hours in Lithuania are 8:00 a.m. or 8:30 a.m. to 5:00 p.m. or 5:30 p.m. Monday through Friday, including one unpaid hour for lunch break, for a total of 8 hours daily (i.e.40 hours weekly).

Probation period rules

According to the Labor Code of the Republic of Lithuania (hereinafter – Lithuanian Labor Code), probation period might be established in employment contracts. The maximum probation period is 3 months but the parties are free to agree on a shorter period as well.

Notice Period 

In case of employment termination on the initiative of an employer without the fault of an employee, standard notice is 1 month. When employment continues for less than 1 year, 2 weeks’ notice is required.

Severance Period

As per Section 38(c) (v) of the Employment and Labor Relations Act, the employer is required to pay the employee severance payment. Severance pay is calculated from at least seven (7) days basic wage for each completed year of continuous service up to a maximum of ten (10) years.

Leave and Benefits

Leave and Benefits rules

Public holidays

Lithuania celebrates 13 national holidays:

  • New Year’s Day
  • Day of Re-establishment of the State of Lithuania
  • Day of Restitution of Independence of Lithuania
  • Easter
  • Easter Monday
  • Labor Day
  • St. John the Baptist’s Day
  • State Holiday Lithuania
  • Assumption Day
  • All Saint’s Day
  • Christmas Eve
  • Christmas
  • St. Stephen’s Day

Employees are generally entitled to four weeks of annual paid leave, which may be taken in parts but not less than 14 days at a time.

Single parents of children under the age of 14 are entitled to 35 days of paid annual leave.

Sick leave

Employees are entitled to paid sick leave in Lithuania. Employers are responsible for the payment for the first two days of illness, at a rate not lower than 62.06% of the employee’s average wage. Often companies pay the employee’s full salary.

Maternity leave & Paternity leave

Female employees are generally entitled to 70 days of maternity leave before the birth and 56 days after the birth. Employees are eligible for all days regardless of how many were actually taken before the birth. The State Social Insurance Fund pays an allowance for maternity leave.

Employees may not be terminated without fault if they have a child under the age of three.

Paid parental leave is available through the State Social Insurance Fund for mothers, fathers, grandparents or other relatives who are raising a child.

Other leave (marriage, bereavement, exam leave)

Bereavement Leave

Upon the death of a family member, employees in Lithuania are entitled to five calendar days of unpaid leave.

Insurance

Health Security & Private Insurance

* Native Teams can support you in finding the best private insurance in the country. Contact us and we will send a comparison of insurance packages and prices*

Visa

Native Teams can support you in finding a Visa in Lithuania. Contact us and we will send a comparison of Visa packages and prices*