Understanding Employment Norms in Lithuania: A Comprehensive Guide
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Hiring in Lithuania? Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in Lithuania?

Employment Norms in Lithuania

The Republic of Lithuania is a country in northeastern Europe. It is a landlocked country with thousands of lakes and natural beauty and has a booming economy that attracts many businesses. However, businesses need to have a local presence if they are looking to expand their outreach. Companies can also hire without having a local entity in the country. It is important for a business to know and abide by the employer of record (EOR) norms.

General Information:

  • The Lithuanian currency is Euro (EUR).
  • Vilnius is the capital of Lithuania.
  • Lithuanian is the official language of Lithuania. Documentation can be in Lithuanian. Documents can be translated into other languages if requested.
  • As of 2022, the GDP of Lithuania was reported to be around 67.25 billion USD.
The Labor Code of 2007 oversees the working conditions in Lithuania. It checks work hours, contracts, minimum wages, leaves, and other employment benefits.
Lithuania map

Table of Contents

  • Agreements
  • Onboarding Process
  • Visa
  • Minimum Wage
  • Payroll Cycle
  • Annual Bonus
  • Health Benefits
  • Working Hours and Overtime
  • Leaves
  • Social Security
  • Taxes for Employers
  • Taxes for Employees
  • Probation
  • Termination
  • Severance Pay
  • Employees or Contractors
  • Final Words


  • Employment contracts must be well-written with all the necessary employment information. Conditions like termination, duty, employment length, and rights should be mentioned.
  • Lithuania has two types of employment contracts: definite or fixed contracts and indefinite or open-ended contracts.
  • Indefinite or open-ended contract - A contract with no fixed end date is called an indefinite contract. It is mutually agreed upon and can be terminated by both parties. It is a widely used contract and hires permanent employees.
  • Definite or fixed-term contract - A contract that ends on a fixed date is called a fixed-term contract. It is agreed upon for a definite type of work and a fixed time. The definite contract in Lithuania must not exceed 2 years. In some exceptional cases, the tenure can be extended to 5 years.
Onboarding Process

Onboarding Process

The onboarding process in Lithuania is just like any other country. However, it may take a few days to complete.
  • The company collaborates with its HR team if there is a job vacancy. A job description is prepared, which has details about the job.
  • Once the appropriate description is prepared, it is uploaded on the company's official sites and other platforms.
  • The employer may choose to publish the vacancy in local newspapers and magazines.
  • Candidates submit their applications by verifying their eligibility criteria.
  • The HR team shortlists candidates on the given criteria and rounds of assessments.
  • Final shortlisted candidates can negotiate with the employer regarding the job. Once both parties reach an agreement, the candidate is hired as an employee.


Lithuania has mainly two types of visas:
  • Short-term visa: It is also called the Lithuania Schengen visa or C visa. It is valid for up to 3 months from the date of issue. This visa is granted for tourism purposes, business invites, medical care, and short stays.
  • Long-term visa: It is known as the Lithuania residence visa or D visa. It is granted for a longer stay of more than 3 months. It includes visas for students, foreign employees, family reunions, and other purposes. A foreign employee/worker who wants to work in Lithuania must have a D-type visa.

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Minimum Wage

Minimum Wage

The minimum wage in Lithuania is recommended by the Labor Code of 2007. It is fixed at around EUR 840 per month. However, the minimum wage depends on the type of work and post of an employee.
Payroll Cycle

Payroll Cycle

The payroll cycle in Lithuania is monthly. The payroll can also be bi-weekly or daily. It is based on the nature of the work and the agreement between the employer and the employee.
Annual Bonus

Annual Bonus

There is no legal provision for giving an annual bonus in Lithuania. However, some employers pay the 13th salary as an annual bonus to employees. This bonus is given based on the performance of the employee.
Health Benefits

Health Benefits

  • The employer is responsible for maintaining the health and safety of its employees.
  • An employee must declare health issues if any.
  • Employees in Lithuania contribute to health insurance facilities. The national government also bears some specific health insurance.
Working Hours and Overtime

Working Hours and Overtime

  • Work hours: The work hours in Lithuania must not exceed 8 hours per day. An employee must not work more than 40 hours per week. The standard working week starts from Monday to Friday.
  • Break:An employee is entitled to unpaid break time of 30 minutes. The break time can be extended to 2 hours if required. An employee must get a continuous rest time of about 8 to 10 hours.
  • Overtime: An employee must not work more than 8 hours of overtime in a week. The employer has to pay 150% of the regular salary to the employee for overtime.


Sick leaves

  • An employee is entitled to paid sick leaves in Lithuania. There is no maximum number of days for sick leave.
  • The first three days of sick leave are covered by the employer and employees get 62.06% of their salary. After three days the sick leave is covered by the state social security fund.

Maternity leaves

  • A pregnant female employee is entitled to 126 days of paid maternity leave in Lithuania.
  • 70 days of leave must be taken before the birth of the child. The remaining 56 days are given after childbirth.
  • The mother is entitled to a 77.58% salary from the state social security fund.

Paternity leave

  • A male employee is entitled to 30 days of paid paternity leave after childbirth.
  • The father is entitled to a 77.58% salary from the state social security fund.

Parental leaves

  • Childcare benefit is paid to the adoptive parent (anyone), to the guardian or to one of the grandparents, who is taking care of the child. State Social Insurance Fund Board pays for the parental leaves.

Annual leaves

  • Employees are entitled to at least 20 days of paid annual leave for 5 working days a week.
  • An employee is entitled to 24 days of paid annual leave if working for 6 days a week.

Public Holidays (for the Calendar year 2023)

  • New Year's Day (1st January)
  • Day of Restoration of the Lithuanian State (16th February)
  • Lithuanian Independence Restoration Day (11th March)
  • Easter Sunday (9th April)
  • Easter Monday (10th April)
  • Labor Day (1st May)
  • Mother's day (7th May)
  • Father's day (4th June)
  • St. John's day (24th June)
  • Statehood day (6th July)
  • Assumption Day (15th August)
  • All Saints' Day (1st November)
  • All Souls Day (2nd November)
  • Christmas Eve (24th December)
  • Christmas Day (25th December)
  • Boxing Day (26th December)

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Social Security

Social Security

Employers and employees contribute to the social security fund in Lithuania. The major part of the social security fund is maintained by the national government. This fund covers sick leaves, maternity and paternity leaves, other leaves, and health benefits.
Taxes for Employers

Taxes for Employers

Every employer has to pay taxes in Lithuania. These taxes include:
  • guarantee fund and long-term unemployment fund - 0.32%
  • social security contributions - 1.47% to 3.5 %

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Taxes for Employees

Taxes for Employees

Every employee in Lithuania has to pay taxes imposed on them. These taxes include:
  • Social security contributions - 19.50% to 22.5%
  • Pension insurance - 8.72%
  • Additional pension insurance - tax ranging from 2.4% to 3%
  • Health insurance - 6.98%
  • Sickness social security - 2.09%
  • Income tax - on gross annual salaries below EUR 81,162 - 20%
  • Income tax - on an annual salary above EUR 81,162 - 32%


There is no fixed provision for a probationary period in Lithuania. It depends on the mutual agreement between the employer and the employee. The general probationary period is of up to 3 months duration.

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  • The termination process in Lithuania is complex.
  • An employer must provide a written notice to the employee before termination.
  • The notice period depends on the tenure of the employee.
  • The notice must also mention the valid reason for the termination.
  • An employee can resign from the work with a written notice stating the reason.
Severance Pay

Severance Pay

An employee is entitled to severance pay in Lithuania in case of termination. The severance pay depends on the tenure of the employee. It may range from a salary of 1 month to a salary of 6 months.
Employees or Contractors

Employees or Contractors

  • A person who works for a company and gets paid is called an employee.
  • An organization or company that hires employees is the employer.
  • There are two types of recognized employment in Lithuania - employees and self-employed.
  • A penalty is imposed if an employer is found guilty of an employee's misclassification. The penalty can range between 868 Euros to 5,792 Euros for each misclassification.
  • The employer has to pay all legal benefits to such a misclassified employee.
  • The employer has to pay all taxes and other contributions on behalf of the employee.
Final Words

Final Words

The Republic of Lithuania is a northeastern European country. Its robust infrastructure and booming economy are attractive to many foreign investors. The country is an excellent choice to grow business outreach. It is necessary to follow the employment norms for companies looking to hire employees in Lithuania. It has a flexible labor code.

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