Discover the global hiring and employment landscape in Lithuania—a vibrant Baltic state with a dynamic economy and a strong focus on technology and innovation. Lithuania's strategic location and business-friendly environment make it an attractive destination for companies looking to expand in Europe.
Explore the employment essentials including payroll, personal income tax, statutory contributions, annual leaves, minimum wage, terminations, visa requirements, and more. Gain valuable compliance insights for a smooth entry into the dynamic Lithuania market with Slasify's global premium HR platform.
| Capital | Vilnius |
| Currency | Euro (EUR) |
| Payroll Cycle | Monthly or Semi-monthly |
| Minimum Wage | EUR 1,038 per month |
| Annual Leave | 4 weeks |
| Personal Income Tax | 20%–32% |
| Taxable Income (VDU, where 1 VDU = EUR 2,108.88 in 2025) | Progressive Tax Rate (%) |
|---|---|
| Up to 60 | 20 |
| Over 60 | 32 |
Sickness benefits, including those paid by the employer, and maternity, paternity, childcare and long-term employment benefits are taxed at 15%, regardless of the employee's annual income.
There are no local taxes on employment income in Lithuania.
The employee's portion of contributions for the state social insurance (VSD) is calculated based on their salaries of up to EUR 126,532.80 per calendar year, while their contribution for health insurance (PSD) is uncapped.
| Contribution rate | Note | |
|---|---|---|
| VSD | 1.45%–2.71% |
This include contributions for unemployment insurance and workers' compensation insurance. For fixed-term employment, the contribution rate shall be 2.17%–3.43%. |
| Guarantee Fund | 0.16% | - |
| Long-term Employment Fund | 0.16% | - |
| Contribution rate | Note | |
|---|---|---|
| VSD | 12.52% | This includes contributions for pension, sickness and maternity insurances. |
| PSD | 6.98% | - |
| Funded Pension Scheme | 3% | - |
An employee's salary shall be paid at least twice a month or, if the employee so requests, once a month.
In any case, work during a calendar month cannot be billed later than within 10 working days from its end unless labor law norms or the employment contract stipulates otherwise.
Effective January 1, 2025, the minimum wage in Lithuania is set at EUR 6.35 per hour or EUR 1,038 per month.
There are no requirements to pay employees any statutory bonus.
An employment contract may end upon its termination by mutual agreement, unilateral decision of either party or by the employer's will, among others.
| Termination by mutual agreement | Termination at the initiative of the employee |
|---|---|
|
Either party may offer the other party to terminate the employment contract by producing a written proposal stating the terms of termination. If the other party agrees to the offer, they shall express their agreement in writing within 5 working days, lest the offer be considered rejected. An agreement on the termination of the employment contract terminates the contract under the conditions specified therein, and the employer must formalize the termination no later than the last working day. |
An indefinite- and fixed-term employment contract may be terminated by the employee's written statement, with or without any significant reasons. The valid reasons for resignation are stipulated in Article 56 of the Labor Code. The employee's statement ends the employment contract after the expiration of the notice period and the employer must formalize the termination of the employment contract no later than the last working day. |
The employer, on the other hand, may dismiss their employees for a valid reason without the fault of the employee or due to the employee's fault, as follows:
| Dismissal without the fault of the employee | Dismissal due to the fault of the employee |
|---|---|
| The work function performed by the employee becomes redundant for the employer due to changes in work organization or other reasons related to the employer's activities | Violence or harassment, including psychological violence and gender-based violence, discriminatory acts and the violation of the honor and dignity of others during work or at the workplace |
| Poor performance, provided that the employee fails to achieve the agreed work results in accordance with their PIP | Appearing drunk or under the influence during work at the workplace, except for cases where such intoxication was caused by the performance of professional duties |
| The court or the employer's body makes a decision that terminates the employer | Refusal to have a health check-up when it is mandatory according to labor law norms |
| The employee does not agree with the continuity of the employment relationship in the event of the transfer of the business or its part | Absence from work for a full working day or shift without a justifiable reason |
| The employee refuses to work under a changed or additional working conditions, provided that the change is based on significant reasons of economic, organizational or production necessity | Intentionally caused material damage to the employer or an attempt to intentionally cause material damage |
| An act with signs of a crime committed during work or at the workplace |
The employer has the right to dismiss their employees without notice and without paying severance if the employee violates the obligations set by the labor law norms or the employment contract due to their own fault or inaction. Before making a decision to dismiss an employee for reasons attributable to the employee, the employer must demand a written explanation and make a holistic assessment of the employee's violation.
Employers who dismiss an employee without there being a fault on the employee's side shall observe the following notice period:
| Length of service | Notice period |
|---|---|
| Less than a year | 2 weeks |
| At least a year | 1 month |
The notice period shall be doubled for employees who have less than 5 years until the statutory retirement age, and tripled for those who are raising a child under 14 years old or a disabled child under 18 years old, pregnant, disabled, have less than 2 years until the statutory retirement age and have an illness included in the list of serious illnesses approved by order of the Minister of Health.
In case of resignation initiated by the employee, the employment contract may be terminated by the employee's written statement, upon notifying the employer no later than at the start of the following notice period:
| Without significant reasons | With significant reasons |
|---|---|
| 20 calendar days | 5 working days |
In any case, during the notice period, the employee must be given a paid duration of at least 10% of the former working time rate to look for a new job upon request.
Note: The employer can generally dismiss an employee "at will" within the limits of the law after giving 3 working days' notice and paying the required severance.
Employers who dismiss an employee without there being a fault on the employee's side shall pay them the following severance:
| Length of service | Severance pay |
|---|---|
| Less than a year | 0.5 month's average salary |
| At least a year | 2 months' average salary |
In case of resignation initiated by the employee with a significant reason, the employee must be paid the following severance:
| Length of service | Severance pay |
|---|---|
| Less than a year | 1 month's average salary |
| At least a year | 2 months' average salary |
Note: The employer can generally dismiss an employee "at will" within the limits of the law by paying a severance equivalent to at least 6 months' average salary.
Parties to the employment contract may agree to up to 3 months of probationary period when concluding an employment contract.
If a fixed-term employment contract is concluded for a period shorter than 6 months, the probationary period must be proportional to the term of the contract, i.e. respectively shorter than 3 months.
If the employer recognized that the results of the probation are unsatisfactory, they can make a decision to terminate the employment contract before the end of the probationary period, and after notifying the employee in writing 3 working days in advance. No severance pay is required for employees who are terminated in this manner.
Note: The duration of the probationary period excludes the time the employee is absent from work due to temporary incapacity, vacation or other important reasons.
Normal working hours in Lithuania are subject to a maximum of 40 hours per week unless the labor law norms determine shortened working hours or the parties agree on a part-time work arrangement.
On the eve of public holidays, the duration of the working day is reduced by an hour, with the exception of employees already working under a reduced working hours arrangement.
Employees must be given a lunch break no later than after 5 hours of work, the duration of which shall be between 30 minutes and 2 hours. Those performing work during which production conditions do not allow them to take a break to rest and eat must be given the opportunity to eat during working hours.
Furthermore, employees must be given physiological breaks according to their needs and special breaks when working outdoors or unheated premises, in conditions of occupational risk, as well as when doing work that requires heavy physical or high mental stress. These breaks shall be included in the calculation of an employee's working time.
In addition to the above, breastfeeding employees shall also be entitled to at least 30 minutes of breastfeeding break without any reduction in pay every 3 hours. This break can be combined with the employee's regular breaks or be moved to the end of the working day, effectively shortening the workday, upon their request.
Overtime work is generally limited to 8 hours per week, unless the employee expresses their consent to work up to 12 hours of overtime per week in writing. It is also important to note the following working hours maximums:
| Total working hours | Average working hours | Overtime |
|---|---|---|
| An employee's total working hours, including overtime and work in accordance with the agreement on additional work, cannot exceed 12 hours per day, excluding a lunch break, and 60 hours per week. | The average working hours, including overtime, but excluding work under an agreement on additional work, cannot exceed 48 hours per week. | The maximum duration of overtime is 180 hours per year unless a longer duration is agreed upon in the collective agreement. |
Employees required to work overtime shall be paid at the following overtime rates:
| Circumstances | Overtime pay |
|---|---|
| General case | 150% of the employee's salary |
| Overtime on a day off | 200% of the employee's salary |
| Overtime at night | 200% of the employee's salary |
| Overtime on a public holiday | 250% of the employee's salary |
As an alternative, the employee may request to be compensated by having their annual leave time extended proportionately to the overtime work, multiplied by the overtime premium.
Generally, the employer can order overtime work only with the employee's consent, except in cases whereby the work is in the public's interest or when the work is absolutely necessary to prevent significant damages to the employer.
Employees shall not work more than 6 days in every 7 consecutive days, effectively granting them a day of rest per week that generally falls on a Sunday.
The following employees shall be entitled to additional rest days, paid at their average wages, i.e. reduction of work hours without loss of pay:
| Circumstances | Additional rest days |
|---|---|
| Raising a child under 12 years old | 1 day per 3 months (or working hours are reduced by 8 hours per 3 months) |
| Raising a disabled child under 18 years old or 2 children under 12 years old | 1 day per month (or the working hours are reduced by 2 hours per week) |
| Raising 3 or more children under 12 years old or raising 2 children under 12 years old when at least one of them is disabled | 2 days per month (or the working hours are reduced by 4 hours per week) |
It is possible to assign a day off to work only with the employee's consent, except in cases where work is carried out according to the cumulative work time regime or in the cases specified in the collective agreement. Those required to work on their weekly rest days must be paid at least double their salary.
In any case, employees shall be entitled to 11 consecutive hours of rest between work days and 35 consecutive hours of rest per week.
Note: If the duration of an employee's working day is more than 12 hours, the time of uninterrupted rest between working days cannot be less than 24 hours.
On public holidays, work is done only with the consent of the employee, except in cases where the work is carried out according to the cumulative working time regime or in other cases specified in the relevant collective agreement.
There are 16 days of public holidays in Lithuania for 2025, and those required to work during a public holiday shall be paid double their salary.
| Holiday | Date |
|---|---|
| New Year's Day | January 1 |
| Independence Day | February 16 |
| Independence Restoration Day | March 11 |
| Easter Sunday | April 20 |
| Easter Monday | April 21 |
| Labor Day | May 1 |
| Mother's Day | May 4 |
| Father's Day | June 1 |
| St. John's Day | June 24 |
| King Mindaugas' Day | July 6 |
| Assumption Day | August 15 |
| All Saints' Day | November 1 |
| Day of Remembrance of the Dead | November 2 |
| Christmas Holiday | December 24–26 |
Employees shall be entitled to at least 4 weeks of paid annual leave, i.e. 20 working days for those working 5 days per week and so on. Certain employees may be entitled to longer annual leave periods, as follows:
| Longer leave due to the employee's personal circumstances | Longer leave due to the nature of the work |
|---|---|
| Employees who are under 18 years old, raising a child under 14 years old alone or a disabled child under 18 years old, or are disabled shall be entitled to an annual leave period equivalent to 5 weeks, i.e. 25 working days for those working 5 days per week. | Work that involves greater stress and occupational risk generally entitles the employee to a longer annual leave period of up to 8 weeks, or up to 41 working days if they work 5 days per week or up to 50 working days if they work 6 days per week. |
Annual leave must be granted at least once per working year, with at least one part of the leave not being shorter than the equivalent of 2 weeks, i.e. 10 working days for employees working 5 days per week.
| First year of employment | Second and subsequent years of employment |
|---|---|
| Annual leave is normally granted after working at least half of the number of working days in the year. | Annual leave is granted at any time of the working year, according to the order of granting annual leave at the workplace as regulated in Article 128 of the Labor Code. |
In any case, an employee's annual leave entitlement shall expire 3 years after the end of the calendar year in which the right to the leave was acquired, unless there is a valid reason why the employee was unable to use it.
Employees who are not able to work due to an illness must continue to be paid for the first 2 days of their absence before having their sickness benefit paid from the State Social Insurance Fund for any subsequent days, provided that the employee qualifies.
Employees shall be entitled to 70 calendar days of pre-natal leave and 56 calendar days of post-natal leave. The post-natal leave duration shall be extended to 70 calendar days in the event of complicated childbirth or multiple births.
Employees on maternity leave shall be entitled to the maternity benefit provided by the Law on Sickness and Maternity Social Insurance of the Republic of Lithuania.
Employees shall be entitled to 30 calendar days of paternity leave after the birth of their child, which can be divided into no more than 2 parts. This leave is granted at any time from the birth of the child until the child turns a year old.
Employees on paternity leave shall be entitled to the paternity benefit provided by the Law on Sickness and Maternity Social Insurance of the Republic of Lithuania.
Employees who are raising a child shall be entitled to take parental leave, which can be taken all at once, in parts or alternately, until their child turn 3 years old.
Each parent, at any time until the child turns 18 or 24 months old, has the right to use part of their 2-month leave to look after the child, which cannot be transferred to anyone else. This leave can be taken all at once or in parts, alternating with the other parent, but not simultaneously at the same time.
Employees on parental leave shall be entitled to the childcare benefit provided by the Law on Sickness and Maternity Social Insurance of the Republic of Lithuania.
| Leave | Explanation |
|---|---|
| Creative Leave |
In cases determined by the Labor code, labor law norms or by agreement between the parties, the employee may be granted this leave to create a work of art or scientific work for 12 months. Whether this leave is paid or not shall be determined by labor law norms and agreements between the parties. |
| Study Leave |
Employees who study in formal education programs are granted study leave, the duration of which varies depending on the purpose of their leave. This leave can be taken to prepare and take regular exams (3 calendar days), prepare and hold tests (2 calendar days), defend a university-level degree (30 calendar days), and prepare and take state final exams (6 calendar days), among others. Those who participate in non-formal adult education programs or self-directed learning shall be granted up to 5 working days of study leave per year after notifying the employer at least 20 working days in advance. This leave shall be paid at half of the employee's average salary, provided that the conditions laid out in Article 135 of the Labor Code are met. |
In addition to the above, certain employees are also entitled to the following unpaid leave upon request:
| Employee making unpaid leave request | Duration of leave |
|---|---|
| An employee raising a child under 14 years old | 14 calendar days |
| An employee raising a child with a disability up to 18 years old | 30 calendar days |
| An employee nursing or caring for a disabled person for whom the need for compensation for the costs of providing individual assistance has been established | 30 calendar days |
| An employee with a disability | 30 calendar days |
| An employee requesting the leave during their partner's pregnancy, maternity leave or paternity leave, as the case may be | 3 months |
| An employee caring for a sick family member or a person living with them, or those who have submitted a health care institution's conclusion about their health status | As long as the health care institution recommends |
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