Lithuania
Lithuania, though a small country, is home to some great remote talent. Want to know how you can hire that talent, legally, without wading into months of paperwork and thousands of dollars in fees? In the next few minutes, we’ll teach you.
Country snapshot
CURRENCY
Euro (EUR)
EMPLOYER TAXES
1.77% - 2.49%
PAYROLL FREQUENCY
Monthly
OFFICIAL LANGUAGE
Balthic
It’s the fastest way to hire globally
Hiring employees takes months, at the minimum. When you hire with Thera's locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It’s a lot cheaper
It costs just $0 to sign up for Thera, then $25 per month to hire your contractors with Thera. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
It’s more flexible for you & your team
Can be less risky than hiring employees
Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.
Some people want to be employees
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
You might not have as much control over your talent
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
Hiring in Lithuania? That’s excellent. There are two options: You can hire your talent as employees, or you can hire them as contractors. Because of Lithuania’s labor law structure, there are benefits and disadvantages to each approach.
Hire talent as contractors
Hire talent as employees
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Lithuania than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Lithuania.
Employer tax
open-ended contract
fixed-term contract
Paid Time Off (PTO)
PTO is calculated by the:
- Employees receive 20 days of annual leave.
Public Holidays
There are 11 public holidays. The day before the public holiday, working hours are reduced by one hour (paid, just one hour shorter is indicated in the timesheet). Public holidays are paid holidays.
Sick Days
The duration of sick leave entitlement provided to workers is dependent on how long they have been employed by their employer:
- 100% of the average salary for the first two days is paid by the employer.
- From the third sick day on, employees receive 62.06% of their salary from SODRA (employer does not incur costs).65.94% is paid by SODRA if the employee takes incapacity for work for the patient’s care.
Maternity Leave
Eligible employees receive 18 weeks (126 days) of paid maternity leave based on an employee’s average monthly wage during 12 consecutive calendar months prior to the beginning of maternity leave.
An additional two weeks is given for complicated childbirths and multiple births. The maternity benefit is 77.58 percent of the recipient’s compensatory earnings.
This amount is calculated on the basis of the person’s insured income received during the 12 consecutive calendar months preceding the month in which entitlement to the maternity benefit arose. The minimum maternity benefit per month cannot be less than 228 Eur.
Paternity Leave
New fathers are entitled to 4 weeks of paternity leave. The pay calculation is the same as specified in the ‘Maternity Leave’ section.
Parental Leave
100% paid up to one year of parental leave. If the parent chooses to receive the benefit until the child reaches two, 70% is paid until child reaches one and 40% thereafter. The pay calculation is the same as specified in the ‘Maternity Leave’ section.
Other Leave
None.
Marriage Leave
None.
Bereavement Leave
None.
Termination Process
For employers to properly terminate an employee, they must provide the correct notice. The length of notice is determined by the length of continuous employment.
Notice Period
The notice period in Lithuania is:
Standard notice is period one month.
For employees with less than 1 year of service, notice period is two weeks.
The previously mentioned notice periods are increased 3 times for:
* Employees raising a child (also adopted) under 14 years of age
* Employees raising a disabled child under age 18
* Disabled employees
* Employees who would be entitled to the retirement pension in 2 years
Notice periods are doubled for employees who will be entitled to the retirement pension in 5 years.
Severance Pay
Severance payments are calculated per one month’s average wage when the employee has been in the company for 12 months or less and up to six months’ average when the employment is over 240 months.
Probation Period
Probation periods are not required but are common. They typically last 3 months.
Working Hours
Full Time employment is 40 hours weekly, and 8 hours daily.
Overtime
Employees are paid 150% of their normal hourly salary for overtime. If overtime is from 10 PM to 6 AM they should receive 200% of their normal hourly salary.
Maximum overtime hours are as follows:
- 8 hours per 7 consecutive days
- 12 hours per 7 consecutive days if the employee expresses his/her consent in writing.
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