Lithuania

Lithuania PEO & Employer of Record

WeHG provides an International PEO and global Employer of Record service in Lithuania to companies willing to enter the Lithuanian market or hire local/expat employees in this country.

Traditional approach requires establishing a subsidiary in Lithuania.  However our solution allows you to start the operations in Lithuania within days hence save time and money.  WeHG would recruit applicants on your behalf while you maintain full operational control of their work. So legally they would be our employees, on our local payroll, 100% compliant but will work on your behalf. .

Lithuania fast facts

Population, million: 2,722,289
Land area: 65,300 km²
Capital: Vilnius
Local currency: Euro (EUR)

GDP per capita:$ 16,489.7
GDP in currency:$ 48,35 billion

Relations between employers and employees are regulated by the Labour Code of Republic of Lithuania and the other legal acts that contain regulations relating to employment and labour.

The Lithuanian Labour Code defines the minimum rights of an employee with respect to the core terms and conditions and material aspects of his/her employment, e.g.: working time, payment for overtime, holiday leave entitlement and other types of leave of absence, parental leaves and benefits, termination of a contract and, in particular, special protection against dismissal, etc. 

Importantly, the Lithuanian Labour Code provides that no employment contract may stipulate conditions that are worse than the minimum provisions provided for under Lithuanian labour legislation.

Hiring, Negotiating and Doing Business in Lithuania

Necessity of written employment contract

An employment contract is concluded in writing and should be signed no later than on the day the employee starts working.

An employment contract must be concluded in Lithuanian if:

  • an employee has place of his/her residence in Lithuania, and
  • the employment contract is or will be executed in Lithuania.

The parties can draft additional language versions of an employment contract. However, the Lithuanian version is always binding and prevails if an employee has Lithuanian nationality.

Lithuania Employment Contract

Types of employment agreements

Types of Employment Contracts:

  • indefinite-term;
  • fixed-term, temporary, seasonal;
  • on secondary job;
  • teleworking;
  • on the supply of services;
  • other

As a rule, an employment contract shall be concluded for an indefinite period of time (indefinite-term).

Lithuania working hours

In general, the work week is 40 hours, with five, eight-hour days.

Overtime

Possible up to 60 hours per week, not more than 120 hours of overtime per year.

Vacation leave in Lithuania

Employee is entitled to 28 calendar days of paid vacation per full year of employment. 

Therefore holiday pay amount is included in each month’s invoice (pro-rated), holiday pay will only be paid when: 

1) Employee takes holiday 

2) He quits job/is laid off – then all unused holiday pay must be paid to employee

Lithuania Maternity Leave

State pays for the maternity leave 100%. It is 1 year, or 2 years. 

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

Sick leave 

Sick leave only first two days are paid by employer of 80% of his salary. The rest is paid by the state.

Lithuanian Severance Laws

An employment contract can be terminated:

  • with the agreement of the parties,
  • by one of the parties giving notice (employer or employee) with a notice period

The length of the notice period depends on the type of contract and the position held by the employee and vary from 3 working days to 4 months. Contracts of employees with special protection against termination (i.e. handicapped persons, pregnant women) are subject to special regulations.

Lithuania Tax

Income is taxed at a flat rate of 15%.

All persons working under employment contracts in Lithuania must be covered by the social security scheme.

The current social security rate applicable to employment related income (i.e. income received based on a regular employment contract) is 39.98% – 41.6% and is divided as follows: 

– Employers – 30.98% – 32.6% (depending on the number of accidents at works occurred in an entity);

– Employees – 3% + 6% of mandatory health tax.

Health Insurance Benefits in Lithuania

All permanent residents of Lithuania must have health insurance, and employees must register with their company’s health insurance fund. The government pays for most services. Dental care is not covered by the state fund.

Additional Benefits in Lithuania

Common benefits include:

  • Supplemental health insurance
  • Car allowance
  • Phone allowance
  • Fitness allowance

Lithuania 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

Why Choose WeHireGlobally

WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your overseas teams efficiently while minimizing cost and risk.

 

FAQ Lithuania

  • Working hours in Lithuania

    In general, the work week is 40 hours, with five, eight-hour days.

  • What are the main holidays in Lithuania?

    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
  • What are payroll taxes in Lithuania?

    Income is taxed at a flat rate of 15%.

    The current social security rate applicable to employment related income (i.e. income received based on a regular employment contract) is 39.98% – 41.6% and is divided as follows: 

    – Employers – 30.98% – 32.6% (depending on the number of accidents at works occurred in an entity);

    – Employees – 3% + 6% of mandatory health tax.

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