Lithuania Employment Guide

Lithuania is on the Baltic Sea coast in Northern Europe, one of the three Baltic States, bordering Latvia, Belarus and Poland. It has ~2.8 million people; its economy focuses on manufacturing, IT, financial services, logistics and agriculture, with Vilnius (the capital) as the political, economic and cultural center. Lithuania’s labor laws require written labor contracts, set a 40-hour standard workweek, and guarantee minimum wages, paid leave and social insurance. Dismissals must follow legal procedures and provide employees with compensation. Its labor relations system is relatively sound, with a stable employment environment and friendliness to foreign-funded enterprises.

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Currency

Euro (EUR)

Capital

Vilnius

Official language

Lithuanian

Salary Cycle

Monthly

Our Employment Guide in Lithuania

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Lithuania's Minimum Wage Standards

Employers in Lithuania must adhere to a statutory minimum gross monthly wage of €924. This baseline compensation applies to full-time employees and serves as the foundation for calculating various social contributions.

Personal Income Tax Structure

Lithuania implements a progressive Personal Income Tax (PIT) system. For the 2024 tax year, earnings up to €114,162 annually are taxed at 20%, while any income exceeding this threshold is subject to a 32% tax rate. This system aims to balance tax burdens across different income levels.

Employer Social Contribution Costs

Beyond gross salaries, employers typically incur additional costs amounting to approximately 1.77% of employee compensation. These mandatory contributions include:

Unemployment insurance: 1.31%
Guarantee fund contribution: 0.16%
Long-term employment fund: 0.16%
Accident and occupational disease insurance: 0.14%

For precise calculation of total employment costs in Lithuania, consult with SailGlobal's compensation specialists who can provide customized quotations based on your specific circumstances.

Overtime Regulations and Working Hours

Lithuanian labor law mandates premium pay for overtime work, defined as hours exceeding the standard 8-hour day or 40-hour week. The legal framework permits maximum overtime of 48 hours weekly and 180 hours annually, with overtime compensation set at 150% of regular pay rates. The standard workweek typically runs Monday through Friday.

International Comparison: Baltic Region Practices

Compared to neighboring Baltic states, Lithuania's overtime regulations demonstrate a balanced approach. For instance, while Estonia allows more flexible overtime arrangements, Lithuania's clearer caps provide stronger worker protections. Companies expanding across the region should note these jurisdictional differences when designing regional HR policies.

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