Employer of Record in Lithuania

An Employer of Record, or EOR, is a company that legally hires employees on your behalf in another country. In Lithuania, an EOR acts as the legal employer for your workers, handling everything from payroll and taxes to benefits and employment contracts. This means you can build a team in Lithuania without needing to set up your own local entity. The EOR takes care of compliance with Lithuanian labor laws, while you manage your employee's day to day work. Providers like Rivermate can streamline the process of hiring in Lithuania.

How an Employer of Record (EOR) Works in Lithuania

Using an EOR simplifies hiring in Lithuania. Here is how it usually works:

1. You Find the Talent You are responsible for sourcing and recruiting your ideal candidate in Lithuania.
2. The EOR Hires Them The EOR legally hires the employee on your behalf. They provide a locally compliant employment contract and handle all the necessary paperwork.
3. Onboarding Begins The EOR manages the onboarding process, ensuring all legal requirements are met. This includes registering the employee with the State Social Insurance Fund Board (Sodra).
4. Day to Day Management You manage your employee's daily tasks, projects, and performance, just like any other member of your team.
5. Payroll and Compliance The EOR takes care of all the administrative tasks. They process payroll, withhold taxes, manage social security contributions, and ensure everything complies with Lithuanian law.

Benefits of Using an EOR for Hiring in Lithuania

Using an EOR gives you a straightforward way to grow your team in Lithuania. It allows you to focus on your main business goals by handing off complex local employment responsibilities.

• Stay Compliant Lithuania has specific labor laws. An EOR understands these rules and ensures you follow them.
• Save Time and Money Setting up a legal entity in a new country is a long and expensive process. An EOR lets you bypass this, saving you significant resources.
• Simplified Payroll The EOR manages all aspects of payroll and tax administration, which can be complex in a foreign country.
• Focus on Your Business With the EOR handling HR and legal tasks, you can concentrate on your core business activities and managing your team.
• Access Local Knowledge EORs have expertise in the local market. They can provide insights into local employment practices and benefits expectations.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Lithuania includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Lithuania.

Hiring in Lithuania means tapping into a skilled and well-educated workforce. The country has a strong economy, especially in technology, manufacturing, and finance. To hire employees, you need to follow Lithuania's labor laws, which align with European Union standards. This ensures fair treatment for both you and your employees.

Employment contracts & must-have clauses

You must provide a written employment contract in Lithuania. The contract should be in Lithuanian, or a language the employee understands. Indefinite-term contracts are standard, but fixed-term contracts are possible for temporary work.

Your employment contracts must include:

• Parties involved: Full legal names and details of both you and the employee.
• Job details: A clear description of the role and responsibilities.
• Work location: Where the employee will work, which can be a fixed address or remote.
• Start date: The official start of the employment.
• Contract duration: State if it's indefinite or a fixed term with an end date.
• Working hours: Details on the work schedule.
• Salary: The base salary and any other compensation.
• Leave: Entitlement to annual paid leave.
• Termination: Terms for ending the contract, including notice periods.

Probation periods

You can include a probation period in the employment contract.

• The maximum length of a probation period is three months.
• For fixed-term contracts shorter than six months, the probation period must be proportional to the contract's length.
• During probation, either you or the employee can end the contract with a three-day written notice.
• If you dismiss an employee during the probation period, they are not entitled to severance pay.

Working hours & overtime

The standard workweek in Lithuania is 40 hours, typically eight hours a day for five days.

Public & regional holidays

Here are the public holidays in Lithuania for 2025:

Hiring contractors in Lithuania

You can hire independent contractors for project-based work. This offers flexibility and can be cost-effective since you don't typically pay for benefits like paid leave or social security contributions. Contractors manage their own taxes and work with more autonomy.

A key risk is misclassifying an employee as a contractor. If the relationship looks like employment (you control their work hours and methods), you could face penalties. These can include fines and back pay for benefits.

An Employer of Record (EOR) helps you avoid this risk. An EOR hires employees on your behalf, ensuring full compliance with Lithuanian labor laws. This way, you can work with talent in Lithuania without needing to set up a local legal entity or worry about misclassification.

Understanding compensation and payroll in Lithuania is straightforward. The system is designed to be clear for both you and your employees. Salaries are paid monthly, and all payments must be transferred to your employee's bank account; cash payments are not allowed. As an employer, you are responsible for withholding taxes and social security contributions from your employees' salaries and remitting them to the appropriate authorities.

Payroll cycles & wage structure

In Lithuania, the payroll cycle is typically monthly. You must pay your employees by the 10th day of the month following the one they worked. This consistent schedule makes it easy to manage your payroll process.

The wage structure is based on a gross salary figure. From this amount, you deduct employee taxes and social security contributions. While a 13th-month bonus is not a legal requirement, performance-based bonuses are common and can be a key part of an attractive compensation package.

Overtime & minimums

The standard work week in Lithuania is 40 hours, based on an 8-hour day. Any work performed beyond these hours is considered overtime. Overtime is paid at a rate of 150% of the employee's regular pay. If an employee works overtime at night (between 10 p.m. and 6 a.m.) or on a public holiday, the rate increases to 200%.

As of January 2024, the national minimum wage is €924 per month.

Employer taxes and contributions

As an employer in Lithuania, you are required to contribute to social security for each of your employees. These contributions cover pensions, health insurance, and other social benefits. The rates depend on the type of employment contract.

Employee taxes and deductions

Employees also contribute to the social security system and pay personal income tax. You withhold these amounts directly from their gross salary.

In Lithuania, your benefits package and leave entitlements are generous and protected by law. You get a solid amount of time off to rest and recharge. The system also provides strong support for life events like welcoming a new child or dealing with an illness. This approach helps you maintain a healthy work-life balance while feeling secure in your job.

Statutory leave

The government sets minimum leave requirements that all employers must provide.

• Annual Leave: You are entitled to 20 working days of paid annual leave. You must take at least 10 of these days in one continuous block. Any unused days can be carried over to the next year. After you work for the same company for 10 years, you get an extra three days of leave.
• Sick Leave: If you are sick, your employer pays for the first two days of leave. They must pay you between 62.06% and 100% of your regular salary. From the third day, the State Social Insurance Fund (SODRA) pays 62.06% of your salary.
• Maternity Leave: Mothers receive 126 days of paid maternity leave. This is typically taken as 70 days before the birth and 56 days after. The social security system pays 77.58% of your regular earnings during this time.
• Paternity Leave: Fathers get 30 days of paid paternity leave. You can take this leave anytime within the first three months after your child is born. Social security pays this at a rate of 77.58% of your salary.
• Parental Leave: After maternity leave ends, one parent can take parental leave until the child is one or two years old, with benefits paid by SODRA. Each parent also has a two-month non-transferable period of paid parental leave.
• Educational Leave: After five years with the same employer, you are entitled to up to 10 days of educational leave per year for professional development, paid at half your salary.

Public holidays & regional holidays

You get paid time off for national holidays. In 2025, Lithuania observes the following public holidays:

Typical supplemental benefits

Companies in Lithuania offer a mix of required and extra benefits to attract and keep employees.

How an EOR can help with setting up benefits

Setting up employee benefits in a new country can be complex. An Employer of Record (EOR) simplifies this process for you.

An EOR already understands Lithuania's labor laws and common practices. We handle all the administrative work. This includes enrolling your employees in mandatory programs like social security and health insurance. We can also advise on and manage supplemental benefits that make your job offers more competitive.

Using an EOR ensures you are fully compliant with local regulations from day one. It saves you time and reduces the risk of making costly mistakes. We take care of the details so you can focus on growing your team.

When an employment relationship in Lithuania ends, you need to follow a clear process. The Lithuanian Labour Code sets the rules for termination and offboarding. You must handle everything in writing, from the termination notice to the final payment. This ensures clarity for everyone and helps you stay compliant.

Notice periods

The notice period for an employee depends on their length of service and the reason for termination.

• Less than one year of service: The notice period is 14 calendar days.
• One year or more of service: The notice period is 30 calendar days.

Certain situations call for different notice periods:

• Probationary period: During the first three months of employment, either you or the employee can end the contract with just three calendar days of written notice.
• Employee resignation: An employee must give 20 calendar days' notice if they resign without a specific reason. If they have an important reason, the notice period is five working days.
• Termination for cause: If you terminate an employee for a serious breach of contract, you must do so within one month of discovering the issue.

Some employees have a right to a longer notice period. For example, employees close to retirement age or those raising young or disabled children may have their notice period doubled.

Severance pay

When you terminate an employee without fault on their part, you must provide severance pay. The amount depends on how long they have worked for you. In most cases, employees are entitled to up to two months of severance pay. However, for long-serving employees, this can be significantly more. For instance, an employee with 20 years of service could receive up to 36 months' pay.

You must pay all outstanding salary, compensation for unused vacation, and severance by the last day of employment. If you delay these payments, you will have to pay interest for each day of delay.

How Rivermate handles compliant exits

We make sure every termination and offboarding process is smooth and compliant. We handle all the necessary steps so you can focus on your business.

Here’s how we manage the process:

• Documentation: We prepare all the necessary written documents, including the termination notice. This notice clearly states the reason for termination and the effective date.
• Communication: We ensure clear communication with the employee throughout the process.
• Final payment: We calculate and process the final payment, including any outstanding salary, vacation pay, and severance.
• Official notifications: We handle the required notifications to government bodies, like submitting the necessary forms to SODRA (the State Social Insurance Fund Board) within one working day of termination.

By managing these details, we help you navigate the complexities of Lithuanian labor law and ensure a compliant and respectful exit for your employees.

Getting the right visas and work permits in Lithuania is straightforward when you know the rules. If you are not a citizen of an EU or EEA country, you will need a work permit and a visa to legally work in the country. Your employer will apply for the work permit on your behalf, and then you can apply for a National Visa D, which allows you to stay and work in Lithuania. The whole process is relatively quick, with work permits typically issued within seven business days and visas taking about 15 working days to process.

Employment visas & sponsorship realities

An Employer of Record (EOR) can be your legal employer in Lithuania and sponsor your work visa. This is a practical route if your company doesn’t have a legal entity in the country. The EOR handles the entire process, from the labor market test to dealing with the Migration Department.

Here are the key things to know:

• Sponsorship is necessary: You can't apply for a work visa as a freelancer or independent contractor. You need a confirmed job offer from a Lithuanian-registered employer.
• Local registration: The EOR must be registered with the Migration Department to sponsor foreign workers.
• Tied to the job: Your work permit is tied to your specific job with the EOR. If you change roles or employers, you may need a new permit.

For highly skilled professionals, the EU Blue Card is another option. This permit requires a university degree or at least five years of relevant experience and a job offer that meets a minimum salary threshold.

Business travel compliance

You can travel to Lithuania for short-term business without a work visa. As part of the Schengen Area, Lithuania allows business-related activities for up to 90 days in a 180-day period.

Permitted activities include:

• Attending business meetings
• Meeting with clients or colleagues
• Participating in conferences or training events

It is important to understand the limits of business travel. You cannot perform work that is part of a service contract or directly enter the local labor market. If you are being sent to work at a Lithuanian branch of your company or for a client, you will likely need a work permit. Always check with the Lithuanian embassy or immigration authorities if you are unsure about your specific activities.