Lithuania at a glance
Taxes in Lithuania
Employer Contributions
| Contribution | Rate |
|---|---|
| Total employer tax | 2.07% – 4.05% |
| Social security | 1.77% – 2.49% |
| Workers' compensation insurance | 0.14% – 1.4% |
| Long-term employment fund | 0.16% |
| Contribution | Rate |
|---|---|
| Total employer tax | 2.07% – 4.05% |
| Social security | 1.77% – 2.49% |
| Workers' compensation insurance | 0.14% – 1.4% |
| Long-term employment fund | 0.16% |
| Contribution | Rate |
|---|---|
| Total employee tax | 26.98% – 54.5% |
| Social insurance (pension, health, sickness, maternity) | 19.5% |
| Gross Income | Tax Rate |
|---|---|
| Up to €126,532 | 20% |
| Over €126,532 | 32% |
Employer of Record in Lithuania
How Remote& EOR Works
Remote& acts as the legal employer of your Lithuanian workers — managing payroll, tax filings, statutory benefits, and employment contracts while you direct the work.
| Party | Role |
|---|---|
| Your Company | Manages work tasks, performance, and team direction |
| Remote& | Runs payroll, files taxes and SODRA contributions, administers benefits |
| Employee | Works for your company under a locally compliant Lithuanian contract |
Ask Remi:
"Hire a software developer in Lithuania — €3,500/month, starting this quarter" Remi handles everything: contract, SODRA registration, payroll setup, and health insurance enrollment.
Benefits in Lithuania
- National health insurance: All residents have access to the Lithuanian national health system, funded through mandatory employee contributions (6.98% of SODRA)
- Education leave: After 5 years of continuous employment, employees are entitled to at least half their salary during up to 10 working days per year of formal or non-formal education leave
- Additional annual leave
- Private health insurance
- SODRA sick leave top-up
- Private pension plan
- Flexible and remote working
- Training and learning budget
- Cash bonuses
- Stock options
Leave entitlements
| Leave type | Entitlement |
|---|---|
| Paid Annual Leave | 20–25 days + public holidays |
| Sick Leave | Employer covers first 2 days; SODRA covers the remainder |
| Maternity Leave | 18 weeks |
| Paternity Leave | 30 days |
| Parental Leave | Up to 3 years (paid at different rates each year) |
Employment conditions
Probation
Optional; cannot exceed 3 months.
Disciplinary Procedures
Employees in Lithuania can be dismissed only after proper procedure: repeated misconduct with a prior warning, or immediately for a gross breach. Complaints must be filed within 1–3 months. If the employer mishandles the process, the employee may receive back pay, possible reinstatement, compensation, or severance of one monthly salary per two years of service (up to six months).
Employee Rights & Protections
Lithuanian workers are entitled to: written employment contract, payslip, remote work rights, health and safety standards, continuous training, contractual claims, unemployment fund access, equal treatment and pay, dismissal protection, and pay transparency.
Payments
End of employment in Lithuania
Lithuania requires a standard procedure to properly dismiss an employee, including a grievance process, valid documented reason, proper written notice, and severance pay where the employee is not at fault (scaled to tenure).
The most common and preferred approach is mutual agreement in writing, detailing agreed terms. Without written documentation, the employer bears the burden of proof in any dispute.
Frequently asked questions
Four paths: run payroll from HQ (legally problematic long-term); use contractors (not compliant for full-time exclusive workers); set up a local entity (complex and time-consuming); or use Remote& as Employer of Record for the fastest compliant route.