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Employer of Record Lithuania
Hire staff and expand your business in Lithuania with our fully-managed EOR Service
How we can help
Unrivalled Employer of Record Service in Lithuania designed to expand your business seamlessly
Agility EOR delivers services for business’s looking for an Employer of Record in Lithuania. We help clients hire new employees or transfer existing employees into a fully-managed EOR service.
We appreciate that each situation and business is different. That is why our personal approach to Employer of Record Services in Lithuania takes care of all HR, payroll, recruitment and compliance head aches, and allows you to do what you love best – driving your business forward.
Employer of Record in Lithuania
A Brief Guide to Lithuania
Lithuania is a vibrant country in the Baltic region, known for its rich history, beautiful landscapes, and warm-hearted people. The country boasts a diverse culture and a growing economy. Lithuania is a parliamentary republic and is a member of various international organizations, such as the European Union, the Schengen Area, and the United Nations.
Category | Information |
Location | Northern Europe |
Capital | Vilnius |
Official Language | Lithuanian |
Area | 65,300 square kilometers |
Population | Approximately 2.8 million |
Currency | Euro (EUR) |
Major Cities | Vilnius, Kaunas, Klaipėda, Šiauliai, Panevėžys |
GDP (2021) | $56.93 billion USD |
Major Industries | Information technology, biotechnology, chemicals, metal processing, logistics |
Business Culture
Business Culture in Lithuania
In Lithuania, the business culture emphasizes punctuality, professionalism, and respect. Building strong relationships and fostering trust are crucial for successful business dealings.
Lithuanians appreciate straightforward communication, attention to detail, and well-prepared meetings. Proper business etiquette, such as exchanging business cards and using appropriate titles, is expected.
Payroll and Taxes
Payroll and Taxes in Lithuania
13th month pay is not mandatory in Lithuania However, performance-based bonuses are common in Lithuania.
Employee Taxation
Taxation and Payroll In Lithuania, employee income tax rates are progressive, with higher income levels subject to higher tax rates.
Gross Annual Income | Tax Rate (%) |
Up to €101,094 | 20% |
Over €101,094 | 32% |
Employer Taxation
Employers in Lithuania are responsible for various employer costs, which include:
Fund Type | Percentage |
Social Security | 1.47-3.72% |
long-term employment fund | 0.16% |
Social insurance (Accidents at work and occupational diseases) | 0.14% |
Pension and Healthcare
Lithuania Pensions
Lithuania has a mandatory state pension system funded by social security contributions from both employees and employers. The contribution rates, as a percentage of an employee’s gross salary, are as follows:
- Employees: 19.5%
- Employers: 1.77%
Healthcare in Lithuania
Lithuania’s public healthcare system provides a range of medical services to its residents, including primary care, specialist services, hospital care, prescription medications, dental care, maternity care, and mental health services. The system aims to ensure equal access to essential healthcare services for all residents, regardless of their financial status or location.
Both employees and employers contribute to the system through a percentage of their salaries. This mandatory contribution is collected by the Lithuanian tax authorities and allocated to the healthcare system.
Employment Law
Employment Law in Lithuania
Relevant Legislation:
Lithuanian employment law is governed by various pieces of legislation, including:
- Labour Code
- Law on Social Insurance
- Law on Health and Safety at Work
- Law on Unemployment Insurance
- Law on Maternity and Paternity Leave
Employment Contracts: Lithuanian employment contracts must be in writing and include essential information such as duration of employment, working hours, salary, and termination notice periods.
Working Hours: The standard maximum working time in Lithuania is 40 hours per week or 8 hours per day. Overtime work is regulated, with compensation for extra hours.
Leave: Employees in Lithuania are entitled to various types of leave, including paid annual leave (minimum of 20 working days per year), maternity leave, paternity leave, sick leave, and family care leave.
Overtime: In Lithuania, overtime work is regulated by law and collective agreements. The law stipulates that overtime pay should be at least 1.5 times the regular hourly wage.
Termination: Termination of employment in Lithuania requires proper notice, which varies depending on the length of employment. Employers can terminate an employee’s contract if there is a just cause, such as poor performance, misconduct, or redundancy. Employers must provide a written explanation for the termination based on just cause. Unjustified termination can lead to claims for damages or reinstatement.
Notice: Both employers and employees must give notice before terminating an employment contract. The notice period varies depending on the employee’s length of service. Generally, the notice period ranges from 2 weeks to 3 months.
Severance Pay: Employees may be entitled to severance pay if they are terminated due to redundancy, restructuring, or other reasons that are not related to their performance or behavior. Severance pay is typically not provided in cases of termination due to misconduct, resignation, or the end of a fixed-term contract. The amount of severance pay an employee is entitled to often depends on their length of service with the employer. In Lithuania, employees must have worked for a minimum of one year to qualify for severance pay, and the amount increases with the number of years of service.
IMMIGRATION
Work Permits in Lithuania
The immigration process in Lithuania is organized and systematic, similar to most countries worldwide. Prospective immigrants usually need to apply for a specific visa or residency permit that corresponds to their reasons for relocating, such as work, education, or joining family members.
Lithuania offers several types of work permits for foreign nationals who wish to work in the country. The specific type of work permit required depends on the applicant’s qualifications, the nature of the job, and the intended duration of the stay. Some of the main types of work permits in Lithuania include:
- Skilled Worker Permit: This permit is designed for individuals who have specialized skills or qualifications that are in high demand in Lithuania. Applicants must have a valid job offer from a Lithuanian employer and must meet certain educational and professional requirements.
- Temporary Work Permit: This permit is issued for short-term employment and is generally valid for up to 12 months. Temporary work permits are typically granted for seasonal work, internships, or other temporary job opportunities.
- Family Reunification Work Permit: Foreign nationals who are married to or in a registered partnership with a Lithuanian citizen or a person with a permanent residence permit may be eligible for a work permit through family reunification. This permit allows the holder to work in Lithuania without restrictions.
Citizens of European Union (EU) countries generally do not need a work permit to work in Lithuania, as they benefit from the freedom of movement within the EU. However, they are required to register with the local Lithuanian authorities if they plan to work and stay in Lithuania for more than three months.
Public Holidays
Lithuania Public Holidays
Holiday Name | Date |
New Year’s Day | 1st January |
Restoration of Independence | 11th March |
Good Friday | Varies |
Easter Monday | Varies |
Labour Day | 1st May |
Mother’s Day | First Sunday of May |
Father’s Day | First Sunday of June |
St. John’s Day | 24th June |
Coronation of King Mindaugas | 6th July |
Assumption Day | 15th August |
All Saints’ Day | 1st November |
Independence Day | 16th February |
Christmas Day | 25th December |
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The Benefits
Lithuania Employer of Record Benefits
When you choose Agility EOR to expand in Lithuania, we guarantee an Employer of Record Service tailored to the needs of your business
Compliance
We are on top of regulatory changes in Lithuania so you can relax.
Cost reduction
Allow our economies of scale to work in your favour.
High Service Levels
You and your employees have a dedicated account manager.
Fixed Cost Pricing
We will agree our professional fees up front based on your needs - no nasty surprises!
Consolidated Invoicing & Payments
Make one monthly payment to cover all your tax, social and wages costs from one to one thousand employees.
Fast delivery
You can have 'boots on the ground' within days on our infrastructure.
Reduced Risk
All wage taxes are remitted in full to the Lithuanian authorities by professionals ensuring liabilities are met, giving you peace of mind.
Supply Chain Transparency
We only pay employees through local full employed solutions meaning Lithuanian payroll tax is paid on all funds.
Save Time and Money
Our expertise is at your disposal. The need for you to have internal HR, Payroll and admin staff is eliminated.