Employer of Record (EOR) in Lithuania

Employment Laws and Regulations in Lithuania

Employment Contracts

The governing statute is the Lithuanian Labour Code (Law No. XII-2603), which entered into force on 1 July 2017 and has been amended multiple times since, most recently in August 2025. The lead regulator is the Ministry of Social Security and Labour, with enforcement by the State Labour Inspectorate (VDI).

Under Article 34, every employment contract must be in writing and must include the place of work, job function, start date, remuneration, working time rules and, where applicable, the fixed-term end date. Contracts are concluded for indefinite duration by default. Fixed-term contracts are capped at two years for the same job function and five years across successive functions with the same employer. Temporary agency work, project-based contracts, job-sharing and apprenticeship contracts are recognised as separate contract types with their own rules. The contract language is Lithuanian, although bilingual contracts are common and enforceable provided the Lithuanian version prevails in case of dispute.

Working Hours and Overtime

The statutory working week in Lithuania is 40 hours, with a daily cap of 8 hours, set by Articles 112 and 114 of the Labour Code. Including overtime, working time may not exceed an average of 48 hours per seven-day period over a four-month reference period, and no individual week can exceed 60 hours. Rest periods are 11 consecutive hours per day and 35 hours per week. Senior managers, employees with unlimited autonomous working time, and employees performing on-call work operate under modified rules set in Articles 142–144.

Overtime must be ordered by the employer with the employee’s written consent, a requirement tightened on 1 January 2025. Maximum overtime is 180 hours per four-month rolling period. Premium pay applies to all hours worked outside the scheduled schedule at the multipliers shown below, as set by Articles 144 and 193.

Instead of cash premiums, employees may request that overtime hours be converted into additional annual leave at the same multiplier (for example, one hour of holiday work becomes 2.5 hours of paid leave). Total overtime cannot exceed eight hours per week averaged over the reference period. Overtime is excluded from 13th-month and annual bonus calculations because Lithuania does not have a statutory 13th-month salary regime.

Minimum Wage

The monthly minimum wage (minimalioji mėnesinė alga or MMA) is EUR 1,153 gross and the minimum hourly wage (MVA) is EUR 7.05 gross, both effective 1 January 2026. The 11.1% increase from the 2025 level of EUR 1,038 was approved by Government Resolution on 16 October 2025, following the formula set out in Article 141 of the Labour Code that ties the minimum wage to purchasing power, wage growth and productivity trends (State Labour Inspectorate).

The minimum wage applies to unskilled work only. Work classified as skilled under the employee’s job description must be paid above the MMA. Lithuania does not have sector-specific minimum wage schedules, but collective agreements in construction, transport and healthcare often set floors above the statutory MMA.

Probation Period

Probation is optional and must be recorded in the employment contract under Article 36 of the Labour Code. The maximum probation period is three months, or six months for certain senior positions set by collective agreement. For fixed-term contracts shorter than six months, probation must be proportionately shorter and cannot exceed one-quarter of the contract term. During probation, either party may terminate the contract with three calendar days’ written notice, and the reduced notice applies equally to both sides. Annual leave accrues from day one of employment, including the probation period, so a dismissal during probation still triggers a prorated leave payout.

Leave Entitlements

Lithuania’s statutory leave framework is set out in Chapter IX of the Labour Code and the Sickness and Maternity Social Insurance Law. The regime is comparatively generous by EU standards, with leave benefits largely funded by Sodra rather than the employer.

Annual Leave

Employees working a five-day week are entitled to a minimum of 20 working days of paid annual leave per year, rising to 24 working days for a six-day week (Article 126). After ten continuous years of employment with the same employer, the entitlement increases by three working days, with one additional working day added for every further five years of tenure. At least one portion of the annual leave must be at least ten working days long. Annual leave accrues from the first day of employment, including during the probation period, and unused leave can be carried forward for up to three years before it must be taken. Leave cannot be paid out in lieu except on termination.

Sick Leave

The first two days of a sickness absence are paid by the employer at a rate set in the employment contract, which must be at least 62.06% and may be up to 100% of the employee’s average salary (Article 139). From the third day onwards, sickness benefit is paid by Sodra at 62.06% of compensatory earnings, subject to a minimum of EUR 281.19 per month and a maximum of EUR 2,998.37 per month in the first quarter of 2026 (Sodra). Eligibility requires at least three months of sickness insurance within the last twelve months or six months within the last twenty-four. A doctor’s electronic certificate is issued through the e-sveikata system and must cover the entire absence.

Maternity Leave

Maternity leave is 126 calendar days (70 days before birth and 56 days after), or 140 calendar days in the case of a complicated birth or multiple births. Sodra pays a maternity benefit at 77.58% of compensatory earnings throughout the leave, calculated on the twelve months preceding entitlement. Job protection is absolute during pregnancy and maternity leave, and dismissal is prohibited except in cases of employer liquidation (Sodra maternity benefit).

Paternity Leave

Fathers are entitled to 30 calendar days of paternity leave, which can be taken in one or two blocks at any point before the child’s first birthday. Sodra pays paternity benefit at 77.58% of compensatory earnings for the full 30 days. Eligibility requires at least six months of insurance within the past twenty-four. Paternity leave is non-transferable to the mother.

Parental Childcare Leave

Either parent can take childcare leave until the child is three years old. Sodra pays childcare benefit under two schedules that the parents elect at the start of leave: 60% of compensatory earnings for 18 months, or 45% for the first 12 months and 30% for the second 12 months. Two months of the benefit are reserved for the father and two months for the mother on a non-transferable basis, paid at 77.58% of compensatory earnings during those four months.

Other Statutory Leave

Additional paid and unpaid leave entitlements round out the Lithuanian leave framework and are set by Article 137 of the Labour Code together with specific statutes.

• Bereavement leave: Up to three calendar days of paid leave on the death of a close family member (spouse, parent, child, sibling, grandparent or grandchild).
• Marriage leave: One calendar day of paid leave on the day of the employee’s marriage, extended on request.
• Study leave: Paid leave for employees taking state-recognised exams, with the number of days tied to the exam schedule.
• Blood donation leave: One paid day off on the day of donation plus one additional day of rest.
• Voting leave: Time off to vote in Lithuanian and European Parliament elections.
• Carer’s leave: Up to five working days per year to care for a seriously ill family member, paid at 65.94% of compensatory earnings by Sodra.

Under the Labour Code, the full suite of statutory leave entitlements available to Lithuanian employees is summarised in the table below. Note that sickness, maternity, paternity, parental and carer’s leave are funded by Sodra (not the employer) once the employer has covered the first two days of illness. The most important takeaway for foreign employers is that leave accrues from the first day of employment, including during probation.

Statutory Employee Benefits

Beyond leave and Sodra contributions, Lithuanian employers have a relatively short list of mandatory benefits. The country’s social insurance model funds most protections centrally through Sodra, which keeps direct employer obligations light compared to Germany, France or even neighbouring Poland. Rates cited here are the headline figures; exact contribution rates appear in the tables in Section 4 and should be read from there.

• Health insurance (PSD): Universal public healthcare is funded by a 6.98% employee contribution withheld from gross salary and administered by Sodra. No separate employer premium is required, though supplementary private health insurance is a common market-standard top-up.
• Pension contributions: The first-pillar state pension is funded by the 8.72% employee contribution to Sodra. Participation in the second-pillar accumulative pension (3% additional employee contribution) is automatic for new labour market entrants but can be opted out. Employer-paid pension top-ups are not mandatory.
• Unemployment and work accident insurance: Funded entirely by the employer as part of the 1.77% Sodra contribution. Rates are detailed in Section 4 and vary by risk class from 0.14% to 1.4%.
• Guarantee Fund and Long-term Employment Fund: 0.16% each, paid by the employer into Sodra. The Long-term Employment Fund funds an additional severance payment to employees dismissed without fault after five or more years of service.
• Statutory sickness benefit (first two days): Employer-paid at between 62.06% and 100% of average salary per the employment contract.
• Meal and transportation allowances: Not statutorily required in Lithuania. Common in collective agreements in manufacturing and logistics but discretionary elsewhere.

Many employers offer voluntary benefits including private health insurance through Medicinos Bankas or Gjensidige, life insurance, gym memberships and stock option plans. These are not statutory but are expected in competitive labour markets such as Vilnius fintech and Kaunas shared services.

Recent Regulatory Updates (2026)

The most significant recent change is the 2026 personal income tax reform, effective 1 January 2026, which adds an intermediate 25% band between the existing 20% and 32% rates. Combined annual income between 36 and 60 times the average monthly salary (approximately EUR 82,962 to EUR 138,270) is now taxed at 25%. The non-taxable amount (NPD) formula was simultaneously rebased to the 2026 minimum wage, with the maximum monthly NPD set at EUR 747 for incomes at or below EUR 1,153 and tapering to zero at higher income levels (KPMG Lithuania).

On the labour side, the written-consent rule for overtime took effect on 1 January 2025, and public holiday overtime is now paid at 2.5 times the base rate (up from 2.0 times). The Labour Code was further amended on 1 August 2025 to clarify the 62-calendar-day non-transferable parental leave block and to extend the definition of workplace violence and harassment to cover conduct directed at managers. Lithuania must transpose the EU Pay Transparency Directive (2023/970) by 7 June 2026, which will require salary ranges in job adverts and gender pay-gap reporting for employers with 100 or more staff.

The 2026 package also increased the standard corporate income tax rate from 16% to 17%, the small-business rate from 6% to 7%, and the minimum wage by 11.1% to EUR 1,153 (Eurofast 2026 tax reform briefing). Foreign worker quotas are reviewed annually and were cut from 40,250 positions in 2024 to 24,830 in 2025; the 2026 quota is published by the Ministry of Social Security and Labour.

Work Permits and Visas in Lithuania

Work Permit Requirements

Who Needs a Work Permit

EU, EEA (Norway, Iceland, Liechtenstein) and Swiss nationals do not need a work permit in Lithuania and can start work immediately under EU free movement rules. They must register their residence with the Migration Department if staying longer than three months. Third-country nationals (including UK, US, Canadian, Indian and most other non-EU citizens) require a work basis and a residence basis, which can be combined in a single permit. Ukrainian citizens benefit from the EU Temporary Protection Directive through at least March 2027, which grants work rights without a separate permit.

Eligibility and Required Documents

To qualify for a Lithuanian work permit, the applicant must have a signed employment contract with a registered Lithuanian employer (an EOR qualifies), proof of professional qualifications, a valid passport with at least six months’ validity, a clean criminal record from the country of origin, and proof of sufficient funds. Highly qualified applicants seeking an EU Blue Card must hold a higher education diploma recognised under the Law on Higher Education and Research and have a contract paying at least 1.5 times the Lithuanian average gross salary, or 1.2 times for shortage occupations. Documents must be translated into Lithuanian and notarised.

Processing Time and Validity

Standard work permit processing through the Lithuanian Employment Service takes two to four months from the labour market test, plus an additional month for the National Visa D at the relevant Lithuanian embassy. A single permit (combining residence and work) issued directly by the Migration Department generally takes one to three months. Initial validity is two years for standard work permits and three years for EU Blue Cards, with both renewable provided the employment relationship continues.

Renewal Process

Renewal applications must be filed with the Migration Department at least 60 days before the permit’s expiry. The employer (or EOR) reconfirms the continuing employment relationship, updated salary and role, and pays the state duty. The employee can continue working during the renewal review period provided the application was filed before expiry. An initial permit rolled over twice (total five years of continuous residence) becomes eligible for long-term resident status under the EU Long-Term Residents Directive.

Common Visa Types for Foreign Workers

Lithuania’s immigration framework is operated by the Migration Department of the Ministry of the Interior. For non-EU hires, the EOR sponsors the application, acts as the registered employer and manages annual quota allocations. The five most common work authorisation categories are shown below; each serves a different employment scenario and has distinct eligibility rules and processing timelines.

Short-stay Schengen C-visas, student residence permits and family reunification permits do not confer the right to full-time employment in Lithuania.

• Schengen C-visa (tourist/business): Valid up to 90 days in any 180-day period. No employment permitted.
• Student residence permit: Allows up to 20 hours of part-time work per week during studies; full-time work only during official holiday periods.
• Family reunification permit: Residence rights for spouses and children but no automatic work authorisation; a separate single permit is required unless the principal holder is an EU Blue Card holder.

How an EOR Handles Work Permits

An employer of record in Lithuania acts as the sponsoring employer for single permits and EU Blue Cards. The EOR prepares and submits the Migration Department application, notarises the translated documents, pays the state duty, and manages the annual foreign worker quota allocation. The employee’s role is limited to providing personal documents, qualification proofs and the biometric appointment at the Lithuanian consulate, and then collecting the residence permit card upon arrival in Lithuania.

Work permit sponsorship typically extends the onboarding timeline from one to two weeks (EU nationals) to six to twelve weeks for non-EU hires, dominated by the Migration Department’s processing window as outlined in the timeline above. In Lithuania, EOR-sponsored permits are fully recognised and included under the national quota system since the 2025 amendments, so there is no gap between an EOR arrangement and a direct hire for immigration purposes.

Payroll, Taxes, and Social Security in Lithuania

Employer Contributions

Employers in Lithuania pay one of the lowest Sodra rates in the EU: 1.77% of gross salary for permanent employees, or 2.49% for fixed-term employees. The headline rate bundles unemployment insurance, the Guarantee Fund, the Long-term Employment Fund and a base work accident premium. The work accident rate is risk-adjusted and can rise to 1.4% for group IV employers (heavy construction, mining), but most office and services employers remain in group I at the minimum rate. A 3% additional employer contribution applies when the employee participates in the second-pillar accumulative pension, though this is recharged from the employee rather than borne by the employer.

Employee Contributions

The employee-side Sodra rate is 19.5% of gross salary, plus an optional 3% accumulative pension contribution for second-pillar participants. The full breakdown is shown below. Employee contributions are subject to a contribution ceiling of 60 times the average monthly wage, which for 2026 equates to annual insurable earnings of EUR 138,729 (Sodra contribution rates). Earnings above the ceiling are not subject to Sodra but remain subject to personal income tax and the health insurance portion, which continues at 6.98% without a ceiling.

Income Tax

Lithuania’s 2026 personal income tax (gyventojų pajamų mokestis or GPM) is the new three-tier progressive system that replaced the 20/32 split in place through 2025. Combined annual income from employment, self-employment and most other sources is aggregated and taxed at the bands set out below. Capital gains, dividends and certain other income categories are taxed separately at flat rates (15% on capital gains up to 120 times the average wage, 15% on dividends). The 2026 non-taxable amount (NPD) tapers from a maximum EUR 747 per month at minimum-wage income to zero above EUR 2,500 per month (VMI).

Payroll Cycle

Lithuanian payroll is paid monthly, typically on the last working day of the month or within five working days of month-end, with salaries paid by bank transfer in euro to a Lithuanian or SEPA-accessible account. Cash payment of salary is permitted only in exceptional circumstances and must be documented. An itemised electronic payslip showing gross salary, Sodra and GPM withholdings, and net pay is required for every pay run.

Employers must submit the SAM declaration to Sodra monthly by the 15th of the following month and pay the combined employer + withheld employee contributions on the same date. Personal income tax is withheld and paid by the 15th, with an annual reconciliation filed with VMI by 1 May of the following year. Foreign employers hiring through an EOR are insulated from these filings because the EOR files under its own Sodra and VMI registrations.

13th Month Salary and Bonus Pay

Lithuania does not have a statutory 13th-month salary. Employers are free to pay a year-end or performance bonus but are not required to do so by the Labour Code, Sodra or VMI. When paid, bonuses are treated as regular employment income, subject to the progressive GPM bands (20/25/32%) and to Sodra contributions up to the annual ceiling. There is no statutory vacation bonus, profit-sharing requirement or 14th-month payment.

Market practice varies by sector. Fintech and IT companies in Vilnius typically pay annual bonuses of 5% to 15% of base salary tied to individual or company performance. Shared-services and BPO employers often pay smaller quarterly bonuses. Collective agreements in manufacturing and transport can set their own bonus schemes but these affect only a minority of the private-sector workforce.

Cost of Hiring Through an EOR in Lithuania

EOR Service Fees

EOR services in Lithuania typically cost between USD 300 and USD 600 per employee per month. The fee is billed in addition to the employee’s gross salary and the employer Sodra contributions, and covers Lithuanian employment contract drafting, Sodra and VMI registration, monthly payroll processing, local HR and compliance support, and statutory reporting. Some providers bundle optional extras (work permit sponsorship, relocation support, supplementary benefits administration) into the flat fee; others charge for these on top.

Total Employment Cost Breakdown

The cost example below shows the monthly total employment cost for a Lithuanian employee earning a gross salary of USD 5,000 (roughly EUR 4,630 at the April 2026 exchange rate). The employer’s add-on cost is unusually low by European standards because of the 1.77% Sodra rate, with the EOR fee being the largest single component above gross. The whole package adds just under 12% to gross salary.

Figures converted at approximately EUR 1 = USD 1.08, April 2026. USD values are indicative; Lithuanian payroll is calculated and paid in euro.

Ready to hire in Lithuania? Get started with Remote People: we handle employment contracts, payroll, tax withholding and full Lithuanian compliance, with no local entity required. Contact the team at remotepeople.com/contact to price your first hire.

Benefits of Using an EOR in Lithuania

Hiring in Lithuania through an employer of record shortens time-to-hire, eliminates incorporation risk, and hands off the recurring compliance workload to a local specialist. The six benefits most commonly cited by international buyers are set out below.

• Speed to market: EU candidates can be hired in one to two weeks, compared with four to eight weeks to incorporate a UAB and an additional four to six weeks to set up Sodra, VMI and banking. For non-EU candidates the EOR absorbs the full Migration Department process.
• Compliance assurance: The EOR tracks the 2026 personal income tax reform, the 2025 written-consent overtime rule and the upcoming EU Pay Transparency Directive transposition by June 2026, so the client does not carry Lithuanian regulatory change as an internal project.
• Cost efficiency versus a local entity: A Lithuanian UAB carries ongoing accountancy, audit, corporate tax filings and registered-address costs. For teams of one to fifteen employees, the EOR fee is typically lower than the fixed overhead of the entity alone.
• Local expertise in the Baltic labour market: An EOR has standing relationships with Sodra, VMI, the Migration Department and the State Labour Inspectorate, and knows the drafting conventions that keep Lithuanian contracts enforceable in labour court.
• Flexibility to scale up or down: Adding or removing employees does not change the cost base of a local entity. Under an EOR, the client simply pays for the headcount it employs, and can wind down without corporate dissolution costs.
• Risk mitigation on termination: The EOR manages Article 57 notice, severance under Article 68, and the Long-term Employment Fund top-up for tenured staff, all of which carry litigation risk if handled incorrectly.

For most companies making a first Lithuanian hire, the EOR path removes more risk than it costs. Remote People quotes a flat monthly fee with no percentage-of-salary uplift, so the total cost is predictable from month one.

Termination and Offboarding in Lithuania

Notice Periods

Notice periods in Lithuania are set by Article 57 of the Labour Code for termination at the employer’s initiative without the employee’s fault, and by Articles 55 and 59 for other termination grounds. Notice can be paid in lieu at the employer’s election. Both sides are entitled to notice during the notice period, and the employee has a statutory right to at least 10% of scheduled working time off for job search activities at full pay (Article 64). Notice is extended for protected categories (employees with minor children, employees close to retirement, employees with disability status) by up to three times the base period. The minimum statutory floors are shown below.

Exceptions apply in cases of just-cause dismissal (Article 58) for serious misconduct, repeated breach of duties or loss of trust; in these cases no notice is required and no severance is owed. Fixed-term contracts end automatically on the agreed date without notice, although a contract that continues beyond its term becomes indefinite under Article 69. Mutual agreement terminations (Article 54) can be signed at any time with the terms both parties negotiate, including the notice period and any ex gratia payment.

Severance Pay

Severance is mandatory in Lithuania for dismissals without the employee’s fault under Article 57 and for termination at the employer’s will under Article 59, and is paid in addition to any owed notice. Severance is calculated on the employee’s average monthly wage over the last three months of actual work, inclusive of regular bonuses, and is paid within ten working days of termination. The Long-term Employment Fund (one of the four components inside the 1.77% employer Sodra rate) pays an additional severance top-up to employees with five or more years of continuous service.

Calculation Method

Severance is calculated as a multiple of the employee’s average monthly wage over the three calendar months preceding termination. The base includes regular salary, regular bonuses paid at least quarterly and overtime premiums, and excludes irregular one-off bonuses, business travel allowances and reimbursed expenses. The Long-term Employment Fund top-up is paid directly by Sodra to the employee, in addition to the severance paid by the employer, and does not come out of the employer’s cash. Worked examples for common tenure tiers are shown in the schedule above: a three-year employee on a EUR 2,000 average wage receives EUR 4,000 severance, and a ten-year employee on the same wage receives EUR 4,000 from the employer plus EUR 2,000 from the Long-term Fund.

Caps and Exceptions

There is no absolute cap on severance in Lithuania beyond the multiples set in Article 68. Severance is not owed in cases of just-cause dismissal under Article 58 (serious misconduct, repeated breach of duties, loss of trust, absenteeism without valid reason), dismissal during probation under Article 36, voluntary resignation under Article 55, or mutual agreement termination under Article 54. Fixed-term contracts that end on the agreed date do not attract severance, but fixed-term contracts terminated by the employer before the agreed end date attract the same Article 68 schedule as indefinite contracts.

Grounds for Termination

The Labour Code distinguishes four main grounds for termination by the employer. Mutual agreement (Article 54) requires a signed written agreement and can include any negotiated exit terms. Employer termination without the employee’s fault (Article 57) requires redundancy-type grounds: economic, technological, organisational or production changes that eliminate the position. Termination with the employee’s fault (Article 58) requires serious misconduct or repeated breach documented by warning, and triggers no notice or severance. Termination at the employer’s will (Article 59) allows dismissal without cause but triggers a minimum six-month severance and is not available to state and municipal institutions.

Protected categories include pregnant employees and employees on maternity, paternity or parental leave (dismissal prohibited except in employer liquidation), employees raising children under 14 (extended notice), and employee representatives on the works council. A dismissed employee can file a labour dispute with the Labour Disputes Commission within one month and seek reinstatement, back pay or additional compensation.

EOR vs. Other Hiring Models in Lithuania

EOR vs. Setting Up a Local Entity

Incorporating a Lithuanian UAB (private limited company) is the traditional route to hiring locally, but carries significant setup and maintenance overhead compared to an EOR. The comparison below is framed for the typical foreign buyer considering their first Lithuanian hire.

The break-even point between EOR and UAB depends on headcount and plans for tendering to public-sector clients. At one to five employees, EOR is usually cheaper on a fully-loaded basis once local accountant fees, annual audit and registered-address costs are included. Above fifteen employees the fixed entity cost amortises better, and EOR percentages (or flat fees per head) become less efficient. Companies planning to bid for Lithuanian or EU government contracts must incorporate regardless of headcount, because those tenders require a Lithuanian-registered legal person.

Many companies run the EOR for eighteen to twenty-four months to validate the market, then incorporate a UAB and transfer the employees once the team size justifies it. Remote People supports that transition by co-signing tri-party novation agreements that move employees from the EOR to the client’s new entity without breaking continuity of service under Article 68.

EOR vs. Hiring Independent Contractors

Engaging Lithuanian workers as self-employed contractors (individuali veikla or a one-person MB under the Simplified Tax regime) is a common alternative to employment, but only in some cases such as genuine project work, specialised consulting or interim executive roles. Lithuanian tax authorities apply a multifactor test of economic reality, working-time control, tools and place of work to distinguish genuine contractors from misclassified employees.

Misclassification exposure in Lithuania includes back-payment of Sodra contributions (employer + employee shares) with interest, GPM underpayment penalties, and potential labour court reinstatement orders for workers who claim they were de facto employees. VMI has increased audits of contractor relationships in the IT sector since 2023, particularly where a single client receives more than 75% of a contractor’s invoices. Companies that want the flexibility of a contractor relationship for a genuinely independent engagement, but want to stay on the right side of classification, typically combine EOR engagement for core team roles with Remote People’s contractor management solution for genuinely independent specialist work.

EOR vs. PEO (Professional Employer Organization)

PEO services in Lithuania are less formally defined than in the United States. Lithuanian labour law recognises temporary agency work (laikinojo įdarbinimo įmonės) as a regulated category but does not have a statutory co-employment framework equivalent to a US PEO. Providers marketing “PEO services” in Lithuania typically deliver HR outsourcing to clients that already have a Lithuanian UAB, while EOR providers act as the legal employer.

The key distinction is legal employer identity. An EOR is the Lithuanian-registered employer that signs the contract, files Sodra returns and absorbs Labour Code liability. A PEO is a back-office HR service that supports a client who already has a Lithuanian UAB and wants to outsource payroll, contracts and benefits administration while retaining direct employment of the workforce.

For companies making their first Lithuanian hire, the EOR model is almost always the right starting point. Companies that already have a Lithuanian UAB but want to reduce HR overhead often use a hybrid model: the UAB remains the legal employer for some roles while new hires onboard through an EOR during a scaling period.

Public Holidays in Lithuania

Lithuania recognises fifteen public holidays per year under Article 123 of the Labour Code plus two moveable family observances (Mother’s Day and Father’s Day). Employees are entitled to a paid day off on each public holiday, and work performed on a holiday is paid at the 2.5 times premium set by the 2025 Labour Code amendments. The 2026 calendar is listed below; dates that fall on a weekend are not automatically moved to the nearest weekday.

Holidays falling on weekends do not shift to a weekday, which affects payroll scheduling for teams with non-standard rosters. Public sector employees and schools typically have additional observances, but these are not statutory for private-sector employers. Employers that schedule work on a public holiday must either pay the 2.5 times premium or give equivalent paid time off within the same reference period. The two moveable observances (Mother’s Day and Father’s Day) are Sundays and normally do not affect payroll.

How to Get Started with an EOR in Lithuania

The EOR onboarding process is a small number of discrete steps, and each one has a clear deliverable. The five-step path below is how Remote People typically brings a new client from first conversation to first payroll.

• First, scope the hire. Confirm the role, location (Vilnius, Kaunas, Klaipėda or remote), gross salary in euro and contract type (indefinite or fixed-term). Remote People’s Lithuanian team will price the EOR fee, identify applicable collective agreements if any, and flag anything non-standard (equity vesting, non-compete, relocation) that needs special drafting.
• Second, sign the services agreement. The master services agreement governs the relationship between the client and Remote People. The separate employment contract between Remote People and the employee references the client as the beneficial services recipient. Both are typically signed within two to three working days.
• Third, onboard the employee. Remote People’s Lithuanian HR team collects personal details, bank information and second-pillar pension election, registers the employee with Sodra before the first working day, and issues a signed Lithuanian employment contract. For non-EU hires the Migration Department single permit is filed in parallel.
• Fourth, run first payroll. Remote People calculates gross-to-net, applies the 2026 NPD and GPM bands, withholds the 19.5% employee Sodra, and produces a payslip. The client receives a single euro invoice covering gross salary, 1.77% employer Sodra and the fixed EOR fee.
• Fifth, manage ongoing operations. The client directs day-to-day work, approves leave and timesheets, and raises change requests (compensation review, role change, termination) through a single HR contact. Remote People handles Sodra, VMI, reporting and Labour Code compliance on the back end.

Ready to hire in Lithuania? Contact Remote People to price your first Lithuanian hire and receive a compliance-reviewed gross-to-net model within one working day. For a full breakdown of payroll obligations, see our companion guide to Lithuania payroll tax and compliance, and for benefit design see the Lithuania employee benefits guide.

Where companies hiring in Lithuania expand next

Companies operating in Lithuania often extend across the Baltics and broader Eastern Europe, where tech talent and cost efficiency align. Many companies add Finland first, drawing on shared Nordic labor frameworks. A team in Ukraine follows as overlapping Baltic cost and talent profiles, while operations in Estonia offers Baltic-region cost parity and deep tech talent. Poland is often the fourth step, valued for matching cost-to-quality tier.