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.

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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, and 180+ other countries, 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.

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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

Lithuania

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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.

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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.

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.

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.

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.

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:

Hiring your first one to five people in Lithuania
Building a fintech, IT or shared-services team fast
Testing the Lithuanian or wider Baltic market before committing to a company
Working to a hiring deadline measured in weeks, not months

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A hot air balloon over the lakes and island castle of Trakai, Lithuania

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 Lithuania Payroll

Lithuanian flags lining a pedestrian street in Kaunas, 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

Salary Benchmarking

Identify and prioritize markets for growth based on talent, cost & regulations

Global Skills Analysis

Map skill availability by region to align talent strategies with business goals..

Talent Acquisition

Find, hire & onboard the highly skilled team members you need in each locality.

Talent Strategy Optimization

Optimize your talent strategy to enable your organization to achieve it’s global ambitions.

Global Benefits Review

Benchmark your global benefits to boost employee retention.

Frequently
asked questions

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.

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.

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.

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.

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 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.