Employment in Lithuania is governed by the Labour Code, with social insurance run by Sodra and income tax collected by the State Tax Inspectorate (VMI). Here is what employers need to know about leave, pay, tax and ending employment.
The Labour Code sets minimum paid annual leave, while sickness, maternity, paternity and childcare benefits are mostly paid by Sodra, the State Social Insurance Fund, to insured employees.
Working days a year for a 5-day week (24 for a 6-day week). 25 working days for under-18s, disabled employees and single parents of a child under 14 or a disabled child under 18.
70 calendar days before and 56 after the birth, longer for complicated or multiple births. Sodra pays a maternity benefit to insured mothers.
Calendar days, taken any time before the child turns one. Paid by Sodra as a paternity benefit.
Either parent can take leave until the child turns 3. Sodra’s childcare benefit is paid for 18 or 24 months, and each parent has at least 2 non-transferable months.
The employer pays a sickness allowance for the first 2 days of incapacity, at between 62.06% and 100% of the employee’s average pay. From day 3, Sodra pays a sickness benefit directly to employees who meet the insurance record requirements. Sickness is certified electronically by a doctor.
Set up each Lithuanian leave type in IceHrm with its own accrual, carry forward and approval rules, including pro-rata entitlements for part-time staff and extra days for long service. Employees see their live balance before they apply, and managers see who is away on a shared calendar. Leave management →
The government sets the minimum monthly wage (MMA), usually reviewing it once a year with changes taking effect on 1 January.
EUR 7.05 per hour for unskilled work, from 1 January 2026 (up from EUR 1,038).
Usually 8 hours a day, Monday to Friday. Working time including overtime may not exceed 48 hours a week on average.
At least 1.5 times the employee’s pay. Work on a rest day not in the schedule or on a public holiday is paid at least double.
Overtime is normally limited to 8 hours in any 7 day period (12 hours with the employee’s written consent) and 180 hours a year, unless a collective agreement sets otherwise. Night work is paid at least 1.5 times the normal rate.
Capture attendance, night work and overtime in IceHrm and feed the hours straight into payroll, so premiums reflect what was actually worked. Time & attendance →
From 1 January 2026 employment income is taxed at three progressive rates, with thresholds set as multiples of the national average monthly wage (VDU). Employers withhold tax monthly and pay it to VMI.
| Annual employment income | Rate |
|---|---|
| Up to 36 average wages (about EUR 82,962) | 20% |
| 36 to 60 average wages (about EUR 82,962 – EUR 138,270) | 25% |
| Over 60 average wages (above about EUR 138,270) | 32% |
Before 2026 there were only two rates, 20% and 32%. Residents file an annual income tax return by 1 May when they have income not fully taxed at source or want to claim reliefs.
Most social insurance in Lithuania is paid by the employee and withheld by the employer, so the employer’s own share is low. Contributions are due to Sodra by the 15th of the following month.
Covers unemployment and accident insurance plus the Guarantee Fund and Long-term Employment Fund, for permanent contracts. Higher for fixed-term contracts.
Withheld from pay, including 6.98% compulsory health insurance. Pension and social insurance stop at a ceiling of 60 average wages a year.
Optional additional pension saving withheld from employees who take part, with a state top-up.
Build Lithuanian pay the way you already structure it, with your own salary components, deductions and formula columns, such as Sodra and income tax columns. Want to know how well IceHrm handles payroll calculations for Lithuania? Contact us or see Payroll →
An employer can end an employment contract for reasons not related to the employee’s fault (such as redundancy or unsuitability), for the employee’s fault, or at the employer’s own will with a large severance payment. Each route has its own notice and severance rules.
| Length of employment | Notice |
|---|---|
| Less than 1 year | 2 weeks |
| 1 year or more | 1 month |
| Length of employment | Severance |
|---|---|
| Less than 1 year | 0.5 month’s average pay |
| 1 year or more | 2 months’ average pay |
Final pay includes compensation for any unused annual leave.
Lithuania has 16 public holidays. Several fall on Sundays by definition, and working hours are shortened by 1 hour on the working day before a public holiday.
Work on a public holiday is paid at least double the normal rate.
Leave groups give each office its own holiday calendar, so your Lithuanian team gets the right days off automatically, alongside colleagues in other countries. Holiday calendars →
Employment contracts must be in writing and signed before work starts. The employer must also give the employee written information about their essential working conditions.
A probation period may be agreed for up to 3 months. Fixed-term contracts for work of a permanent nature may last no more than 2 years in total, and successive fixed-term contracts for temporary work with the same employer no more than 5 years.
Send contracts for e-signing, store them on the employee’s record, and track onboarding with task lists, such as the Sodra notification, so nothing is missed before day one. Documents & e-signing →
This guide is general information to help you plan HR processes, not legal, tax or financial advice. Employment law and rates change regularly and awards, enterprise agreements and state rules may give employees more than the minimums shown here. Always confirm current requirements with the official sources or a qualified adviser.
Configure leave types, accrual rules and public holidays for Lithuania, keep employee records and contracts in one place, and run payroll with your own salary components. Want to know how IceHrm handles payroll calculations for Lithuania? Talk to us.
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