--- title: "Lithuania" id: "15248" type: "employer-of-record" slug: "lithuania" published_at: "2025-08-12T12:54:58+00:00" modified_at: "2026-09-23T15:42:12+00:00" url: "https://topsourceworldwide.com/employer-of-record/lithuania/" markdown_url: "https://topsourceworldwide.com/employer-of-record/lithuania.md" taxonomy_continent: - "Europe" --- # Employer of Record in Lithuania Employ talent in Lithuania without a local entity — Sodra social contributions, GPM income tax and EUR payroll handled by local specialists. [Get Started](https://topsourceworldwide.com/contact-us/) ## Why hire in Lithuania through an EOR Lithuania has one of the EU’s lowest employer contribution burdens: employer Sodra is just 1.77% for permanent contracts, because the social-insurance weight sits almost entirely on the employee side. The nuances are the Sodra floor and ceiling and the 2026 progressive income-tax reform. Through an EOR, all of it is already running. ### No entity required Employ staff in Lithuania, one of 164 countries we cover, without registering a Lithuanian UAB or maintaining a local presence. ### The EU's lowest employer burden Employer Sodra is just 1.77% of gross for permanent contracts (2.49% for fixed-term) — the social-insurance weight sits on the employee’s 19.5%. We calculate and remit both sides correctly. ### Gross-to-net handled We deduct the employee’s 19.5% Sodra and apply progressive GPM income tax (20/25/32% from 2026), with the tax-free amount (NPD) applied so net pay is always right. ### Sodra floor and ceiling managed A minimum contribution floor applies to low earners, and pension contributions cease above 60x the average wage. We handle both edges automatically. ### Working in days, not months We register the employment before day one — your hire can be working in Lithuania in days, while an entity setup would still be weeks away. ## Hire in Lithuania without setting up an entity Lithuania is one of the EU’s most cost-effective and digitally efficient hiring markets: a skilled, English- and Russian-proficient Baltic workforce, a euro economy, and a fintech and shared-services boom. Its standout feature for employers is cost structure — employer Sodra social contributions are just 1.77% of gross for permanent contracts (2.49% for fixed-term), because Lithuania places the social-insurance weight on the employee, who pays 19.5%. The minimum wage is EUR 1,153 a month from January 2026, and 2026 brought a significant reform: personal income tax (GPM) moved to a progressive three-tier system of 20%, 25% and 32%. An Employer of Record removes the setup and the arithmetic: TopSource employs your Lithuanian hires with Sodra calculated and remitted, gross-to-net handled under the new progressive GPM, the tax-free amount applied, and the Sodra floor and ceiling managed. Hire into the Baltics fast and compliantly. [Talk to our Lithuania team](https://topsourceworldwide.com/contact-us/) ## Calculate Your Employee Costs in Lithuania Enter a gross salary to see the full monthly cost of a hire in Lithuania — the 1.77% employer Sodra and the employee’s progressive gross-to-net in one view. ##### Employment Cost Calculator *Indicative figures only and not definitive legal advice. Local regulations change frequently. [Consult an expert](/contact-us/) ##### Lithuania Annually Monthly | | British Pound | Lithuania | | --- | --- | --- | | Base Salary (per month) | | | | Employer Contributions | | | | Total Cost (Annual) | | | | Total Cost (Monthly) | | | Employer of Record services in [Learn more](#) Payroll Outsourcing in [Learn more](#) ## How EOR in Lithuania works: the process through TopSource Step 1 ### Confirm the role and structure We agree the position, salary and benefits with you, confirm the applicable tax-free amount (NPD) and whether the contract is permanent or fixed-term, and check work permit needs for non-EU hires. Step 2 ### Issue a compliant contract Your new hire receives a written employment contract in Lithuanian under the Labour Code, with probation, notice, leave and Sodra details clearly set out. Step 3 ### Register the employment We register the employee with Sodra at least one working day before they start — a strict pre-employment requirement in Lithuania. Step 4 ### Run payroll in EUR We calculate salary, employer Sodra (1.77% or 2.49%), deduct the employee’s 19.5% Sodra and progressive GPM, apply the tax-free amount, and file monthly. Step 5 ### Support the relationship day to day Your account manager and the employee both have a direct line for contract questions, leave, tax-free amount queries and anything else that comes up. ## Know your Lithuania hiring costs before you commit Tell us the role and salary — we’ll send back the full Lithuanian employment cost, Sodra and gross-to-net included, within one business day. [Get a Custom Employment Quote](https://topsourceworldwide.com/contact-us/) ## Employer Costs in Lithuania at a Glance 1.77% Employer Sodra contribution (permanent contracts) €1,153 Monthly minimum wage from 1 January 2026 20 Minimum statutory annual leave days ## Employer Costs in Lithuania Explained Lithuania has one of the lowest employer cost structures in the EU. Employer Sodra social contributions are just 1.77% of gross salary for permanent contracts (2.49% for fixed-term), while the employee pays 19.5% (12.52% social insurance plus 6.98% health) and progressive GPM income tax, all withheld at source. The minimum wage is EUR 1,153 per month from January 2026, and from 2026 income tax runs on a progressive 20% / 25% / 32% scale. Here’s the breakdown. #### Employer Sodra: just 1.77% (the EU's lightest) Lithuania inverts the usual European cost model. The employer’s Sodra contribution is only 1.77% of gross salary for permanent (indefinite) contracts — or 2.49% for fixed-term contracts — which includes small allocations to the Guarantee Fund and Long-Term Employment Fund, plus a variable workplace-accident premium by risk class. This makes Lithuania one of the cheapest EU countries to employ in on the employer side: a EUR 3,000 gross salary costs the employer roughly EUR 3,053. The trade-off is that the social-insurance weight sits on the employee, whose 19.5% is deducted from gross — so gross salaries are negotiated with that in mind. #### Employee deductions: 19.5% Sodra and progressive GPM The employee pays 19.5% Sodra — 12.52% state social insurance (VSD) and 6.98% health insurance (PSD) — withheld from gross, plus personal income tax (GPM). From 2026, GPM moved from a largely flat system to a progressive three-tier scale: 20% on income up to 36 average wages, 25% on the next band, and 32% at the top, part of a reform to reduce inequality and fund defence. A tax-free amount (NPD) reduces the taxable base for lower and middle earners on a tapering formula. Employees in the second-pillar pension accumulation scheme contribute an additional percentage on top. #### The Sodra floor and ceiling Two edges shape Sodra. A minimum contribution floor applies: for employees earning below the minimum monthly wage, combined employer-and-employee contributions are assessed on at least a set minimum (EUR 245.24 combined in 2026), so very low-hour roles carry a contribution floor. At the other end, a ceiling of 60 times the average monthly wage (roughly EUR 138,000+ a year) caps most Sodra contributions — above it, only the 6.98% health contribution continues, while pension and other contributions stop. For senior hires, this makes total cost more predictable once they cross the cap. We apply both edges automatically. #### Leave, minimum wage and the Labour Code Statutory annual leave is a minimum of 20 working days (for a five-day week), with more for certain categories, plus paid public holidays. The minimum wage is EUR 1,153 per month (EUR 7.05/hour) from January 2026. Employment is governed by the Labour Code, which requires written contracts in Lithuanian, sets notice periods, and regulates termination — dismissal needs valid grounds and, in many cases, severance. Sick leave is paid by the employer for the first two days, then by Sodra. We apply all of it correctly within payroll. ## EOR or entity setup: which one fits your Lithuania plan? Registering a Lithuanian UAB is fast and inexpensive by EU standards, but it creates Sodra registration, monthly filings, Lithuanian-language documentation and a formal dismissal regime that don’t disappear when plans change. An EOR makes sense while you’re testing the market or building a first team; your own entity usually makes sense once Lithuanian headcount and permanence are certain. ### Consider an EOR if you’re: 1. Hiring your first one to five people in Lithuania 2. Building a fintech, IT or shared-services team fast 3. Testing the Lithuanian or wider Baltic market before committing to a company 4. Working to a hiring deadline measured in weeks, not months [Get a cost comparison](https://topsourceworldwide.com/contact-us/) ## Why TopSource for Employing in Lithuania TopSource for Employer of Record, global payroll or any other of our services represent a simpler, more reliable and transparent option. We don’t hide fees or sneak price increases. We don’t lock you in for employees you don’t use. But we do give you a dedicated point of contact, available on the phone so you get answers fast — including on the questions Lithuania raises, from the permanent-vs-fixed-term Sodra rate to the 2026 progressive GPM and the tax-free amount. We blend HR advisory with in-market expertise, and we stay flexible around the needs of your business. [EOR Services](https://topsourceworldwide.com/employer-of-record/) [Lithuania Payroll](https://topsourceworldwide.com/global-payroll/lithuania/) > “Their expertise and understanding of the unique hiring, payment, and human resource practices in each country has been nothing short of outstanding. Our Client Success Manager, has done just that … ensured our success. Her availability and willingness to engage on a personal level has made all the difference.” Director of Research Operations, > “Excellent service, especially from our account manager who has gone above and beyond to help us use the platform effectively. Our manager, significantly simplifies my workload. It is like having your own TopSource HR representative on your team.” Chief Human Resources Officer, > “TopSource has been our go-to resource for international hiring. They are responsive, thorough, respectful and knowledgeable. The Client Success team has provided us with the utmost customer service, and the more we use TopSource, the more, it gives us access to more resources and knowledge.” Senior Manager, Human Resources , ## More than an Employer of Record. Employer of Record services are only one way that we help you accelerate your global growth goals. From talent advisory to entity management, we give you the tools you need to research, enter and expand into your key markets. ##### Market Selection Advisory Compare available talent, compensation, additional costs and regulations across different countries [Read more](https://topsourceworldwide.com/hr-advisory/market-selection-advisory/) ##### Salary Benchmarking Identify and prioritize markets for growth based on talent, cost & regulations [Read more](https://topsourceworldwide.com/hr-advisory/salary-benchmarking/) ##### Global Skills Analysis Map skill availability by region to align talent strategies with business goals.. [Read more](https://topsourceworldwide.com/hr-advisory/global-skills-analysis/) ##### Talent Acquisition Find, hire & onboard the highly skilled team members you need in each locality. [Read more](https://topsourceworldwide.com/talent-acquisition/) ##### Talent Strategy Optimization Optimize your talent strategy to enable your organization to achieve it’s global ambitions. [Read more](https://topsourceworldwide.com/hr-advisory/talent-strategy-optimization/) ##### Global Benefits Review Benchmark your global benefits to boost employee retention. [Read more](https://topsourceworldwide.com/hr-advisory/global-benefits-review/) ## Frequently asked questions ### What does an employee in Lithuania actually cost? Lithuania is unusually cheap on the employer side: take the gross salary and add just 1.77% employer Sodra for a permanent contract (2.49% fixed-term), plus a small accident premium. The employee’s 19.5% Sodra and progressive GPM income tax are withheld from gross, not an employer cost. We quote the exact all-in figure per hire before you commit. ### Why is the employer contribution so low in Lithuania? Lithuania places the social-insurance burden on the employee (19.5%) rather than the employer (1.77% for permanent contracts). Gross salaries are set with this in mind. It’s one of the lowest employer contribution rates in the EU, which makes Lithuania attractive for cost-conscious expansion — though the employee’s net is lower than the low employer rate might suggest. ### How does Lithuanian income tax work in 2026? From 2026, personal income tax (GPM) moved to a progressive three-tier system: 20%, 25% and 32%, replacing the previous largely flat structure. A tax-free amount (NPD) reduces the taxable base for lower and middle earners on a tapering formula. We calculate GPM at source and apply the correct NPD so net pay is right. ### What are the Sodra floor and ceiling? A minimum contribution floor applies to low earners (combined contributions assessed on at least EUR 245.24 in 2026), so low-hour roles carry a floor. A ceiling of 60x the average wage (roughly EUR 138,000+ a year) caps most Sodra — above it, only the 6.98% health contribution continues. We handle both automatically. ### What is the minimum wage and statutory leave in Lithuania? The minimum wage is EUR 1,153 per month (EUR 7.05/hour) from January 2026. Statutory annual leave is a minimum of 20 working days for a five-day week, plus paid public holidays. Employment is governed by the Labour Code, which requires written Lithuanian-language contracts and regulates notice and termination. ### EOR or our own Lithuanian entity — which should we choose? EOR wins on speed and simplicity: employees working in days, Sodra registration and monthly filings handled. Your own UAB wins on scale once Lithuanian headcount and permanence are certain — entity costs are low here, so the crossover can come relatively early. We transfer the team across when the time comes. [Couldn’t find what you were looking for?](/contact-us/) ## Hire Anywhere with Our EOR Services We help you legally employ and pay talent across 164 countries—so you can scale faster. 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Managua Currency: Córdoba](https://topsourceworldwide.com/employer-of-record/nicaragua/) [Nigeria Capital: Abuja Currency: Nigerian Naira](https://topsourceworldwide.com/employer-of-record/nigeria/) [Norway Capital: Oslo Currency: Norwegian Krone](https://topsourceworldwide.com/employer-of-record/norway/) [Oman Capital: Muscat Currency: RIAL](https://topsourceworldwide.com/employer-of-record/oman/) [Pakistan Capital: Islamabad Currency: Pakistani Rupee](https://topsourceworldwide.com/employer-of-record/pakistan/) [Panama Capital: Panama City Currency: Balboa](https://topsourceworldwide.com/employer-of-record/panama/) [Papua New Guinea Capital: Port Moresby Currency: Papua New Guinean Kina](https://topsourceworldwide.com/employer-of-record/papua-new-guinea/) [Paraguay Capital: Asunción Currency: Guaraní](https://topsourceworldwide.com/employer-of-record/paraguay/) [Peru Capital: Lima Currency: Peruvian Sol](https://topsourceworldwide.com/employer-of-record/peru/) [Philippines Capital: Manila Currency: Peso](https://topsourceworldwide.com/employer-of-record/philippines/) [Portugal Capital: Lisbon Currency: Euro](https://topsourceworldwide.com/employer-of-record/portugal/) [Puerto Rico Capital: San Juan Currency: Dollar](https://topsourceworldwide.com/employer-of-record/puerto-rico/) [Qatar Capital: Doha Currency: Riyal](https://topsourceworldwide.com/employer-of-record/qatar/) [Romania Capital: Bucharest Currency: Romanian Leu](https://topsourceworldwide.com/employer-of-record/romania/) [Rwanda Capital: Kigali Currency: Rwandan Franc](https://topsourceworldwide.com/employer-of-record/rwanda/) [Saint Kitts & Nevis Capital: Basseterre Currency: Dollar](https://topsourceworldwide.com/employer-of-record/saint-kitts-nevis/) [Saint Lucia Capital: Castries Currency: Dollar](https://topsourceworldwide.com/employer-of-record/saint-lucia/) [Saint Vincent & the Grenadines Capital: Kingstown Currency: Dollar](https://topsourceworldwide.com/employer-of-record/saint-vincent-the-grenadines/) [Saipan Capital: Capitol Hill Currency: US Dollar](https://topsourceworldwide.com/employer-of-record/saipan/) [San Marino Capital: City of San Marino Currency: Euro](https://topsourceworldwide.com/employer-of-record/san-marino/) [Saudi Arabia Capital: Riyadh Currency: Riyal](https://topsourceworldwide.com/employer-of-record/saudi-arabia/) [Senegal Capital: Dakar Currency: West African CFA Franc](https://topsourceworldwide.com/employer-of-record/senegal/) [Serbia Capital: Belgrade Currency: Serbian Dinar](https://topsourceworldwide.com/employer-of-record/serbia/) [Seychelles Capital: Victoria Currency: Seychellois Rupee](https://topsourceworldwide.com/employer-of-record/seychelles/) [Slovakia Capital: Bratislava Currency: Euro](https://topsourceworldwide.com/employer-of-record/slovakia/) [Slovenia Capital: Ljubljana Currency: Euro](https://topsourceworldwide.com/employer-of-record/slovenia/) [Solomon Island Capital: Honiara Currency: Solomon Islands Dollar](https://topsourceworldwide.com/employer-of-record/solomon-island/) [South Korea Capital: Seoul Currency: Won](https://topsourceworldwide.com/employer-of-record/south-korea/) [South Sudan Capital: Juba Currency: South Sudanese Pound](https://topsourceworldwide.com/employer-of-record/south-sudan/) [Sri Lanka Capital: Colombo Currency: Rupee](https://topsourceworldwide.com/employer-of-record/sri-lanka/) [St-Maarten Capital: Philipsburg Currency: Caribbean Guilder](https://topsourceworldwide.com/employer-of-record/st-maarten/) [Sudan Capital: Khartoum Currency: Sudanese Pound](https://topsourceworldwide.com/employer-of-record/sudan/) [Suriname Capital: Paramaribo Currency: Surinamese Dollar](https://topsourceworldwide.com/employer-of-record/suriname/) [Sweden Capital: Stockholm Currency: Swedish Krona](https://topsourceworldwide.com/employer-of-record/sweden/) [Taiwan Capital: Taipei Currency: Dollar](https://topsourceworldwide.com/employer-of-record/taiwan/) [Thailand Capital: Bangkok Currency: Thai Baht](https://topsourceworldwide.com/employer-of-record/thailand/) [Trinidad & Tobago Capital: Port of Spain Currency: Trinidad and Tobago Dollar](https://topsourceworldwide.com/employer-of-record/trinidad-tobago/) [Tunisia Capital: Tunis Currency: Tunisian Dinar](https://topsourceworldwide.com/employer-of-record/tunisia/) [Uganda Capital: Kampala Currency: Ugandan Shilling](https://topsourceworldwide.com/employer-of-record/uganda/) [United Kingdom Capital: London Currency: Pound Sterling](https://topsourceworldwide.com/employer-of-record/united-kingdom/) [US Virgin Island Capital: Charlotte Amalie Currency: United States Dollar](https://topsourceworldwide.com/employer-of-record/us-virgin-island/) [Venezuela Capital: Caracas Currency: Venezuelan Bolívar](https://topsourceworldwide.com/employer-of-record/venezuela/) [Zambia Capital: Lusaka Currency: Zambian Kwacha](https://topsourceworldwide.com/employer-of-record/zambia/) [Zimbabwe Capital: Harare Currency: Zimbabwe Gold (ZiG)](https://topsourceworldwide.com/employer-of-record/zimbabwe/) Load more