Establish your presence globally with Neeyamo as we help you go beyond borders to manage your international payroll and hire new talent in Lithuania.
Have you ever walked into a house and instantly recalled its scent? Scientists have found that certain scents can be linked with specific memories, and each time an individual is exposed to this scent, it acts as a memory trigger. Have you ever associated a smell with a whole country? Lithuania's scent is known as "The Scent of Lithuania." Lithuania is the first country to have its designated scent meant to capture the essence of the country and its history. The scent comprises notes of sandalwood, ginger, raspberry, musk, wildflowers, and more.
Does your organization’s expansion plans require you to hire employees in a country so rich in history that it could be captured in a scent? Do you lack a physical entity in the country – a key requisite to hiring local talent? Neeyamo – Global payroll services assists organizations worldwide with onboarding and managing employees in Lithuania- processing payroll accounting and tax services, managing local compliance requirements, benefits, and more.
Tools And Instances
Facts And Stats
1 January - 31 December
Country Calling Code
Lithuanian Time Zone (GMT+03:00)
Handling payroll for a widespread workforce can pose a significant challenge for any firm. The added complication of compliance can make things worse and drastically affect the time and efforts that can be used in other equally important aspects of an organization's development. The solution to this is using outsourced payroll providers.
Payroll processing companies like Neeyamo outsource payroll services around the globe to aid companies in maneuvering the tricky payroll system in Lithuania. The advantages of using one of the best payroll outsourcing companies include handling global payroll for all your needs, including - employees working in primary geographies, the long-tail region, remote or internationally located.
Over the years, global payroll service providers, have observed these complexities and strived to provide global payroll solutions through a single technology platform, Neeyamo Payroll
Payroll tax is the percentage amount retained from an employee's salary and paid to the government to invest in the general population's welfare. These are statutory in nature and are levied from both the employer and employee. Additional statutory contributions are made by employers towards aiding both short-term and long-term benefits for their employees.
Employees have to make the following contributions:
- Social Insurance (up to an income of 90,246 EUR) - 19.50%
- Social Insurance (above 90,246 EUR) - 6.98%
- Total Employee Contribution - 19.50% to 26.48%
Employee income tax is as follows:
- Up to 101,094 EUR - 20%
- Above 101,094 EUR - 32%
Employer payroll contributions are as follows:
- Social Insurance (indefinite contracts) - 1.77%
- Social Insurance (fixed contracts) - 2.49%
- Total employer cost - 1.77% to 2.49%
Undoubtedly, payroll is a critical process for any organization. The pay cycle refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.
The payroll frequency in Lithuania is typically monthly. An employer must pay salaries by the 10th of the following month.
13th Month Cycle
13th-month payments are not required by law in Lithuania; however, it is common for employers to pay a performance-based bonus.
An Employer of Record service provider helps you eliminate the hassle of handling the complexities of setting up a new employee in remote locations. They act as legal employers, facilitate salary payments, and handle everything from health insurance, payroll taxes, and employee benefits to comply with local tax laws and regulations.
This ensures that the client company can focus on the employee's everyday tasks safely, knowing they have a cost-effective solution as they continue their global expansion.
HR Mandates and Practices
The minimum wage in Lithuania is €924 per month. The minimum hourly wage is €5.65.
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%.
Working Week: Monday-Friday
Data Retention Policy
The Personal Data Protection Law provides no specific retention period for personal data. However, specific Lithuanian laws may provide for minimum (or maximum) retention periods, including:
- Contracts for goods, works, services, and acts of acceptance of goods, works, and services must be kept for ten years upon the expiration of the contract (The Office of the Chief Archivist of Lithuania Order No. V-100 of 9 March 2011) (only available in Lithuanian here) ('the Order No. V-100'));
- An employment contract must be kept for 50 years upon the expiration of the agreement ('the Order No. V-100'); and
- Annual financial and budget implementation reports (sets of reports, etc.) must be kept for ten years ('the Order No. V-100').
Hiring and Onboarding Requirements
EU/EEA citizens do not require work permits in Lithuania. However, if the employee (and their families) stays in Lithuania for over three months within six months, they must obtain a certificate attesting to their right to stay.
The following information must be provided during the onboarding process:
- Name (matching the account where you'll deposit their pay).
- Date of Birth
- Date of Hire
- Contact information, including their mailing address in Lithuania.
- Lithuanian personal ID/tax identification number
- Bank account information.
- Amount to be paid in euros
- Forms to register the employee with the State Social Security Fund (SODRA).
- Forms to register employees with the State Tax Inspectorate (VMI).
The employer must send out an employment agreement outlining essential working conditions such as type of work, position, location of work, working days and hours, monthly salary, date work starts, and probation or trial period.
Probation periods are not mandatory in Lithuania; however, standard practice is a probation period of 3 months.
There are 16 public holidays.
- Jan 1 - New Year's Day
- Feb 16 - Independence Restoration Day
- Mar 11 - Independence Day/National Day
- Apr 9 - Easter Sunday
- Apr 10 - Easter Monday
- May 1 - Labour Day
- May 1 - Mother's Day
- Jun 4 - Father's Day
- Jun 24 - St. John's Day/ Day of Dew
- Jul 6 - King Mindaugas' Coronation Day
- Aug 15 - Feast of the Assumption of Mary
- Nov 1 - All Saints' Day
- Dec 24 - Christmas Eve
- Dec 25 - Christmas
- Dec 26 - Second Day of Christmas
Paid Time Off
Lithuania's annual leave entitlement depends on the employee's years of service; the standard entitlement is 20 working days of paid annual leave. One installment of leave must be at least ten 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.
In Lithuania, the employer is responsible for paying the first two days of illness at a benefit rate of 62.06% to 100% at their discretion and as specified in the employment contract. From the third day of illness, the employee will receive 62.06% of their regular salary 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 social security if the employee is eligible. The maternity benefit equals 77.58% of the employee's standard pay rate. 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.
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 can 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 all at once or in parts. However, it cannot be taken by both parents simultaneously.
Parental leave starts after maternity leave and continues until the child turns one, and is paid 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 birth mother's partner 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.
As of August 2022, Employees with one child under the age of 12 will be granted one additional paid day of rest every three months or a reduction in the working time of 8 hours every three months. A request must be submitted to the employer to grant Mother's Day/Father's Day each time. For the first time, before the parental day is granted, the employee must submit the children's birth certificates."
Bereavement leave: Employers must give employees three days of unpaid leave upon the death of a family member.
In Lithuania, the standard notice period is 30 days for all employees with a minimum of one year's service. For employees with less than one year of service, the notice period is two weeks.
Employees with less than five years left until the statutory age of pension shall have the notice period doubled.
The notice period may also be subject to an increase where the employee is raising a child under the age of 14, raising a disabled child under 18, or for employees entitled to the retirement pension in 2 years.
Employees with 12 months or less of service are entitled to half of the average monthly salary. The severance pay entitlement is two months for an employee who served more than one year and less than 20 years. Employees who have completed 20 years of service are entitled to six months of salary. Severance pay is calculated based on the average salary figure.
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 a 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.
Employee Background Checks
Legal and Background Checks
In Lithuania, it isn't mandatory to run background checks on employees, but Lithuanian employers can choose to do limited screening under current regulations.
In Lithuania, you can conduct different background screenings based on a new hire's role. Here are the most common types and a few other background checks you can consider (more on each one below).
- Common background checks
- Employment history
- Personal reference check
- Work Authorization
- Education History
Less common background checks, usually made depending on the role
- Credit reports
- Social media profiles
- Driving records
- Medical records
- Criminal records
Last updated on January 11, 2024
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