🇱🇹 Hiring in Lithuania

💡 Everything you need to know to hire and manage employees in Lithuania through Toku. Toku handles payroll processing, tax withholding, social contributions, and statutory compliance. This guide covers what you need to plan costs and manage your team.

At a Glance

Onboarding a New Hire

Plan for 5-7 business days between submitting a new hire and their start date. The employee provides their personal code and bank details, and Toku registers them with Sodra (social insurance) and completes the employment contract registration before day one; Lithuanian law requires the signed contract to be in place before the employee starts work.

Submit your new hire through the Toku platform and we take it from there: local employment agreement, statutory registrations, and payroll setup. See Onboard Contributors as a Client Admin in Toku for the step-by-step process, and the Country Readiness Live Tracker for lead times across all countries.

Employer Costs

On top of gross salary, you pay the following employer contributions in Lithuania:

As a rule of thumb, total cost of employment is roughly 102-104% of gross salary. Lithuania is unusual in that most social contributions sit on the employee side rather than the employer side.

Employees pay 12.52% social insurance (up to an annual ceiling of EUR 138,729 in 2026), 6.98% health insurance (no ceiling), and personal income tax at 20% on most employment income (25% and 32% at higher bands). These are withheld from gross salary, not charged on top. Toku calculates and remits all of the above.

Compensation & Payroll

Payroll in Lithuania is monthly. Toku runs one payroll per month, and employees receive an itemised payslip each cycle. Salaries are paid in euros by bank transfer.

The minimum monthly wage for 2026 is EUR 1,153 gross (EUR 7.05 per hour). The minimum wage may only be paid for unskilled work: roles requiring qualifications must be paid above it. There is no statutory 13th month salary, though performance bonuses are common market practice.

Employment Contracts & Probation

• Toku issues a compliant local employment agreement for every hire, signed and registered before the employee's first day as Lithuanian law requires.
• Indefinite-term contracts are the default. Fixed-term contracts are capped at 2 years for permanent work (5 years in specific circumstances).
• Probation may be up to 3 months, the statutory maximum. During probation, either party may end the contract with 3 working days' written notice and no severance.

Working Hours

The standard working week is 40 hours (8 hours per day, 5 days). Overtime is capped at 8 hours per 7-day period (12 with the employee's written consent) and 180 hours per year. Overtime pays 150% of regular pay, rising to 200% on rest days and 250% on public holidays; night work (22:00-06:00) also pays 150%. Employees must get at least 11 consecutive hours of rest between working days and 35 consecutive hours per week.

Leave Entitlements

Parental leave is state-funded and includes two non-transferable months per parent paid at 78%. Maternity benefit requires at least 12 months of social insurance contributions within the prior 24 months.

Public Holidays (2026)

Lithuania has 16 public holidays in 2026. Employees required to work on a public holiday receive at least double pay or compensatory time off.

Benefits: Required vs. Common Extras

Statutory (included in employer costs above): Sodra social insurance covering pensions, sickness, maternity and paternity benefits, unemployment, and occupational accident insurance, plus compulsory health insurance giving access to the public healthcare system.

Toku offers fully sponsored international health coverage through Remote Health. See Remote Health, Your Global Insurance Plan for coverage details and enrollment.

Other common extras in Lithuania include supplementary private health insurance (tax-free up to EUR 350 per employee per year from 2026), meal vouchers, transport allowances, training budgets, additional leave days, and life insurance. Toku can advise on how each of these affects your total cost.

Ending Employment

Lithuania is not an at-will jurisdiction: terminations must fit the specific grounds and procedures in the Labour Code, and some groups (such as employees within 5 years of retirement or raising a child under 14) get extended notice. Involve Toku early whenever you are considering a termination. For the process, see How to Terminate an Employee or Contractor.

For termination at the employer's initiative without employee fault, severance is two months' average salary (half a month if service is under one year), and employees with 5 or more years of service receive an additional long-service payment from a state fund. Lithuania also allows termination at the employer's will without cause, but this costs six months' average salary in severance. Mutual agreement exits are negotiated case by case.

Hiring Someone from Overseas?

EU, EEA, and Swiss citizens can work in Lithuania without a permit. Non-EU nationals generally need a work permit plus a national D visa or temporary residence permit, with the employer showing the role cannot be filled locally; the EU Blue Card is available for highly qualified hires, and processing takes 1-4 months. Talk to Toku before extending an offer to a candidate who needs sponsorship.

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Last verified July 2026. This guide is for general information and doesn't constitute legal or tax advice. Your Toku account manager can confirm specifics for your situation.