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Lithuania is known for its highly skilled workforce, with a strong emphasis on technology, engineering, and research sectors. As of 2025, the country’s economic growth continues to outpace many other EU nations, driving demand for professionals in technology, finance, healthcare, and manufacturing. However, employers must adhere to specific labour laws to maintain compliance when recruiting and managing employees.
Facts & Stats
Lithuania's labor laws are designed to protect employee rights while ensuring a flexible labor market for employers. These laws regulate employment contracts, probation periods, annual leave, sick leave, and termination processes, among other critical aspects.
A probation period in Lithuania is up to 3 months, during which either the employer or the employee can terminate the contract with minimal notice (1–2 weeks). After the probation period ends, the employee gains full rights under the permanent employment contract.
Employees in Lithuania are entitled to statutory paid annual leave based on their weekly working hours. The minimum statutory leave is 20 days for those working a 40-hour workweek, but this can be higher depending on company policies or sector-specific agreements.
In Lithuania, the standard workweek is 40 hours spread across 5 days. If employees work overtime, they are entitled to 1.5x their regular hourly rate for the first 2 hours. Overtime worked on public holidays or rest days is compensated at 2x the regular hourly rate.
Employers should track overtime hours meticulously to ensure compliance with labor laws. Failure to track and compensate overtime can lead to legal penalties and dissatisfaction among employees.
The minimum wage in Lithuania as of 2025 is set at €730 per month for a full-time employee. Employers must ensure they meet or exceed this threshold for all employees, including part-time and temporary workers. The minimum wage is updated periodically based on economic conditions and inflation.
Lithuanian employers and employees must both contribute to social security and pension funds. The employee contributes a fixed percentage from their gross salary toward social security and pension schemes. Employers are required to match this contribution.
19.5 %
Employees in Lithuania pay social security and health contributions withheld from their gross wages.
1.77 % – 2.49 %
Employers in Lithuania are responsible for social security and payroll contributions on top of the employee’s gross salary.
20 %
Lithuania applies personal income tax (PIT) on employment income using two rates.
Employers must follow strict guidelines when terminating an employee's contract in Lithuania, especially regarding notice periods, severance pay, and justifiable reasons for termination.
The notice period for termination in Lithuania is based on length of service:
- Less than 1 year: 1-month notice
- 1 to 5 years: 2-month notice
- Over 5 years: 3-month notice
Employees are entitled to severance pay, typically calculated as 1 month’s salary per year of service for involuntary termination.
Employers must ensure they comply with statutory leave entitlements and maintain accurate records. In addition to annual leave, employees are entitled to sick leave, maternity and paternity leave, and public holidays.
Frequently asked questions
Is it mandatory to hire Lithuanian nationals?
No, it is not mandatory to hire Lithuanian nationals. Employers can hire candidates from within the EU without a work permit. However, non-EU candidates will need a valid work permit and meet legal requirements.
How is severance pay calculated in Lithuania?
Severance pay in Lithuania is generally calculated as 1 month’s salary per year of service if the employee is terminated without cause. Employees with longer service may be entitled to higher severance.
Do employees in Lithuania receive a pension?
Yes, employees are entitled to pension contributions through the national social insurance system. Employers also contribute toward employees’ pension savings, which is crucial for long-term financial stability.
What’s the official workweek in Lithuania?
The official workweek in Lithuania is 40 hours, typically spread over 5 days. Overtime is compensated according to legal regulations, with higher rates for public holidays or additional work hours.
