Facts & figures

Government Type: Unitary semi-presidential republic

Capital: Vilnius

Currency: Euro (EUR)

Languages: Lithuanian

GDP Per Capita: 38,605 USD (2020)

Main Business sectors: 68.3%

Industry: 28.5%

Agriculture: 3.3%

Employment Rate: 77.8%

Global People has a significant advantage in Lithuania thanks to our experience in providing global employment solutions and in-depth understanding of the unique employment culture at each location.

When looking to employ in the Lithuania, its incredibly important to understand the employment structure and be familiar with all employment rules and guidelines. 

Global People, has a significant advantage in Lithuania thanks to:

  • Experience in providing global employment solutions
  • Extensive professional network
  • Top networking strategies and good understanding of the broad employment world and culture.
  • An accurately designed process that assures compliance and provides a tangible ROI.


Global people’s services include:

  • PEO and HR management.
  • Realistic calculation of employee compensation.
  • Payroll, tax liabilities, insurance and employee benefits.
  • A designated point of contact for the client and the employees, available for any query or question that may rise.
  • Accessible consultation and professional opinions.

Employment Manual – Lithuania

The employment agreement or contract must comply with Lithuanian law and EU rules. The agreement must refer to:

  • Annual salary
  • Overtime entitlement
  • Sick leave
  • Annual Leave
  • Allowances
  • Severance pay
  • Notice period
  • Probation period



In the case of employment termination, the party terminating the employment contract must submit their notice in writing, indicating the reason for termination, the legal provision in which the basis of the termination and the date of termination of employment relationship.

Notice is given depending on the length of the employment. If the employment relationship was less than a year, 2 weeks’ notice shall be given, when the employment relationship exceeds 1 year of service, the employee will receive 1 months’ notice. In cases where the employee has less than 5 years left until the statutory age of old age pension, the notice period shall be doubled.

The notice period may be also increased in cases where the employee is raising a child under the age of 14, raising a disabled child under the age of 18 or employees entitled to the retirement pension in 2 years.

In the event of dismissal, the employee is entitled to severance pay of 2 average monthly salaries. If the employment relationship lasted less than a year, the amount paid to the employee will be equal to a half of the average monthly salary. Additionally, the dismissed employee receives a severance pay from a special state fund, amount of which depends on the continuous length of employment.

Payroll Taxes

The pension system in Lithuania is made up of three Pillars in which pensions are accumulated differently. The first and mandatory pillar is the state social security. The second and third pillars are not mandatory and they are voluntary contributions to a private pension scheme.  

Employee Payroll Taxes

Lithuania requires a flat tax rate of 20% on wages. 

In cases the annual gross salary exceeds a cap, the tax rate increases to 32%.

Mandatory Employee benefits

  • Employees that work 5 days a week are entitled to 20 days of leave.
  • Employees that work 6 days a week are entitled to 24 days of leave.
  • One installment of annual leave may not be shorter than 10 working days (or 12 for 6 day workers).
  • At the employee’s request, part of the extended annual leave may be carried over into the next leave year.
  • The first 2 days of sick leave are paid by the employer.
  • The sick pay will be at least 80% and no higher than 100% of the employee’s average monthly salary.
  • From the 3rd to 7th days of absence, the employee is paid at a rate of 40% by the state social insurance fund.
  • From the 8th day onward, the employee is paid 80% until they are able to get back to work.
  • There are 14 bank or public holidays in the Lithuania.
  • Expectant employees are entitled to maternity leave of 70 days before childbirth and 56 days after the delivery.
  • When there is a birth of two or more children or in the event of complicated confinement, the mother is entitled to 70 days after the delivery.
  • If the employee does no take pregnancy and childbirth leave, the employer must provide 14 days of leave immediately after childbirth.

Specific Employee Benefits and Industry Benchmarks

Most employers grant employees additional paid leave days, which amount to 5 annual weeks yearly.

Get an Employment
Budget Simulation

For Salary Simulation please fill in the following information:
special end of year promotion
Use our team of experts & you will enjoy:

* Subject to availability and terms and conditions of the promotion

<!– Calendly inline widget begin –>
<div class=”calendly-inline-widget” data-url=”” style=”min-width:320px;height:630px;”></div>
<script type=”text/javascript” src=””></script>
<!– Calendly inline widget end –>