Payroll and HR
Administration in Lithuania

Lithuania – Payroll and HR administration services

Global Expansion Plus provides payroll and HR administration services in Lithuania. Use our solutions to take care of your people in Lithuania. We make sure that your people are being taken care of, and your entity is safe from violating local legislation. The Labor Code governs the Lithuanian labor relationship.

Hiring and onboarding employees in Lithuania

If you are hiring a foreign employee, you need to consider obtaining the work permit first. Please see below. Once you agreed on the job offer with your future employee, you need to start the onboarding process.

Onboarding Process

One of the significant aspects of onboarding in Lithuania is signing an employment contract. The employment contract shall be prepared in writing. Contracts are very regulated, and the government provided a model employment contract that needs to be used as a draft.
The contract shall include position, workplace, salary, working time leaves.
Fixed-term contracts are allowed by the Labor Law. But, the number of fixed contracts cannot exceed 20% of the total number of employment contracts of an entity.
A fixed contract also may be based on a temporary project if an employee is hired for the project duration and can be prolonged, if necessary. The maximum is two years. If the project-based agreement replaces the existing employment contract, the required minimum duration of such a contract is five years.

Probation Period

The standard trial period is three months or can be shorter. The probation period includes only active workdays

Health and Safety

An employer is required to provide a safe and healthy work environment. Requirements for work conditions are contained in the “Labor Protection Law” of Lithuania. Following the requirements mitigates the risks of damage to the health and safety of the people.

Work permits and Visas in Belarus

Visa Types

Lithuania is a member state of the Schengen zone. The Schengen zone is the territories of European countries that have signed the Schengen agreement. The concept of this zone is that its external borders are highly protected, and controlled, but the internal borders are canceled.
To visit Lithuania, you need to get a Schengen visa:
  • Visa Type A - Airport transit - a visa issued for transit through the international airport areas of the Schengen Member States.
  • Visa Type C - Short-stay visa – a visa issued for transit through or a stay in the Schengen Member States with a duration under 90 days in the period of 180-days.
  • Visa Type D - National visa – a visa issued to enter Lithuania and stay for more than 90 days. For the foreigner that has a temporary or permanent residence permit, a single entry is issued by the Migration Service of the Republic of Lithuania. A multiply entry is issued for an extended stay in the Republic.

Work Permit

A company that wants to employ the foreign citizen needs to register a vacancy at the local labor exchange one month before applying for the work permit.
A company that attracting a foreign employee needs to submit the following documents:
  • Filled in the application;
  • A contract that is between a local company and foreign company on sending an employee to perform the job Lithuanian;
  • The foreign company registration extract;
  • Detailed project description and reasons for attracting a foreign citizen;
  • Foreign citizen's passport;
  • Draft employment controls;
  • Medical insurance policy;
  • Prove of educational records;

Working hours and leaves in Lithuania

Working hours and overtime

The new Labor Code of Lithuania stipulates the standard of the workweek of 40 hours. Previously, the daily norm of working hours was 8 hours. Now there is no such requirement, the daily minimum of rest time is equal to at least 11 hours per day, and the weekly norm for resting is 35 hours.
In case an employee is engaged in the main job and performs the additional job at the same company or works additionally at another company, the maximum working time per day can be no more than 12 hours, and per week – no more than 60 hours.
The maximum rate of overtime has increased – up to 12 hours per week and 180 hours per year. Overtime is legal only with the written consent of the employee.

Vacation leave

The annual paid vacation leave is 20 days per year and 24 hours for an employee that works six-day workweek. On of the vacation, leaves cannot be shorter than ten business days, and 12 days for a six workhour week. Compensation for the days on vacation is paid at least one day before the start of the vacation leave.

Sick leave

The employer pays the first two days of sick leave. The compensation is equal to 80 or 100% of the employer’s decision.
The Ministry of Social Security and Labor (known as Sodra) pays the third to the seventh day. The compensation is equal to 40% of the average pay. Staring the eighth day and on, the payment will be equal to 80% of the average salary.

The average salary is calculated, taking into account the last full quarter. To be eligible for the sick leave compensations, and employee needs to have at least three months of continuous work for the previous six months and six months of constant work for the last two years.

Maternity and paternity leave

According to the Labour Code on Lithuania, women are eligible for the 70 days maternity leave before the delivery of a child and 56 calendar days proceeding the childbirth.
In case of a complicated pregnancy or the birth of two or more children, the second part of the paid maternity leave is expenses to 70 calendar days. The compensation is calculated and paid in one installment regardless of the duration of the maternity leave.

Holidays in Lithuania 2020

  • 01 January 2020 - New Year's Day
  • 16 February 2020 - Restoration of State Day
  • 11 March 2020 - Restoration of Independence Day
  • 12-13 April 2020 - Easter
  • 01 May 2020 - Labor Day
  • 03 May 2020 - Mother's Day
  • 24 June 2020 - St. John's Day
  • 06 July 2020 - Anniversary orf coronation of King Mindaugas
  • 01 November 2020A - ll Saint's Day
  • 24-26 December 2020 - Christmas

Remuneration & Benefits in Lithuania

Minimal wage salary is set onсe per year and equal to EUR 607 in gross. The minimum hourly rate is EUR 3.72

Employee termination and severance in Lithuania

Under Lithuanian legislation, there are many reasons for termination of employment stipulated by the Labour Code. Employers can terminate an employment agreement due to the following reasons:
  • Position of the employer is redundant;
  • Performance of the employer is not satisfactory;
  • An employee does not agree to the new employment requirements;
  • An employee does not accept reallocation or transfer;

Notification period

The standard notification period is one month. If an employee worked for less than one year, a notification period of two weeks is required. Employee shall inform his employer within three days’ notice.

Severance payments

Severance payment would equal two months of average salary. If an employee worked less that one year the severance payment is equal to half of the average monthly salary. If termination is not based on one of the reason-based above the severance payment equals to six average salaries.

Payroll related taxes in Lithuania

Employee taxes

Employees are paying Personal Income Tax of 20%, salary over 84 average salaries (EUR 116 424) will be taxed at 32%. The average salary for the year 2020 is set at EUR 1380.
The social payments consist of the following payments:
  • Social Insurance Tax of 2,09%; and
  • Pension Fund of 8,72%%;
  • Maternal social insurance 1.71%;

Employer taxes

Social securities taxes paid by an employer is following:
  • Unemployment Social Insurance 2.03%;
  • Guarantee fund 0.16%;
  • Long-term employment fund 0.16%;
  • Social Insurance of industrial accidents and occupational diseases 0.14%;
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