Government Type: Unitary semi-presidential republic
Currency: Euro (EUR)
GDP Per Capita: 38,605 USD (2020)
Main Business sectors: 68.3%
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:
Global people’s services include:
The employment agreement or contract must comply with Lithuanian law and EU rules. The agreement must refer to:
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.
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.
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%.
Most employers grant employees additional paid leave days, which amount to 5 annual weeks yearly.
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