Employment Law

Employment Contracts in Lithuania

Employment contracts in Lithuania are usually indefinite and all employees are required to sign a formal employment contract. Any contract should include all relevant employment details such as salary/wages, benefits, termination provisions, and severance pay. They should also be written in Lithuanian and use the local currency, the euro.

Fixed Term

Indefinite

Lithuania Working Hours

The standard working week in Lithuania is 40 hours, with a 5-hour day and an 8-hour working day.

Holiday Policy

Lithuania Vacation

Employees in Lithuania are entitled to four weeks (20 days) of paid leave per year. This leave must be taken in installments, with a maximum of 14 days at a time.

Lithuania Sick Leave

Employees in Lithuania are entitled to paid sick leave. Compensation for the first two days of absence is at least 80%, borne by the employer. Days three to seven must be compensated at least 40% of normal wages, and then the government will pay for any further absences at 80% of normal wages.

An employer cannot fire an employee who has been absent from work for 120 days due to illness.

Parental Leave in Lithuania

Employers in Lithuania are generally required to grant 70 days of maternity leave before an employee gives birth and 56 days after childbirth. Employees on maternity leave are compensated by the state social security scheme.

Employees can also take parental or carer leave to raise children, which is also compensated by the state.

Termination and Severance in Lithuania

Employees in Lithuania may terminate their employment contract by giving 14 days' written notice. Employers must provide two months' written notice. Employees who are fired for no-fault reasons are generally entitled to severance pay of one to six months' salary, depending on their length of service.

The probation period in Lithuania can last up to three months, during which the notice period is three days.

Lithuanian Taxes

Employees are usually required to pay 6% of their salary for health insurance and 3% for social insurance.

Employers must pay social insurance of 27.98% of wages, health insurance premiums of 3% and state security fees of 0.2%.

Income tax in Lithuania is generally 15% or 20%, depending on income level.

The corporate tax rate for most companies in Lithuania is 15%.

Health Insurance in Lithuania

Compulsory health insurance for employers and employees, as well as state funding, cover the public health system, so employers are not required to provide private insurance. Some employers may still choose to provide supplemental private insurance to their employees.

Salary and Benefits

Compensation Law in Lithuania

The minimum wage for a full-time worker in Lithuania in 2020 is €607 per month.

Welfare Administration in Lithuania

Setting up a benefits system for the Lithuanian workforce can be difficult and complex if you are not familiar with the country, its customs and employment laws. Standalone setup can take weeks and may cause unexpected delays.

Remoly can simplify your Lithuanian benefits administration. Our Lithuanian experts can handle everything for you, helping you focus on a successful expansion.