--- title: "Lithuania" id: "15638" type: "global-payroll" slug: "lithuania" published_at: "2025-08-14T07:27:32+00:00" modified_at: "2026-09-23T15:43:15+00:00" url: "https://topsourceworldwide.com/global-payroll/lithuania/" markdown_url: "https://topsourceworldwide.com/global-payroll/lithuania.md" taxonomy_continent: - "Europe" --- # Payroll Services in Lithuania Fully managed Lithuanian payroll – Sodra contributions on both sides, income tax under the new progressive rates with the tax-free amount applied, and every monthly return filed by the 15th, with a named specialist a phone call away. [Get in touch](https://topsourceworldwide.com/contact-us/) TopSource rated 5/5 by our customers - - - - - [Read reviews](#testimonials) ## What Lithuanian payroll actually involves Lithuania puts almost all social insurance on the employee, so the employer cost is low but the gross-to-net is heavy. 2026 added a progressive income tax, and every employee has to be registered with Sodra before their first day. ### 1.77% on top of gross pay Employer Sodra is 1.77% of gross salary on a permanent contract and 2.49% on a fixed-term one. It is one of the lowest employer rates in the EU. ### 19.5% comes out of the employee’s pay Employees pay 12.52% social insurance and 6.98% health insurance, withheld from gross. Salaries are negotiated with that deduction in mind. ### Progressive income tax from 2026 Income tax is 20% up to EUR 83,237 a year, 25% up to EUR 138,729 and 32% above. A tax-free amount lowers the tax on salaries below about EUR 2,677 a month. ### Register before day one Employees must be registered with Sodra at least one working day before they start work. Missing it is one of the most common first-hire mistakes. ### Monthly returns by the 15th The income tax return and the Sodra declaration for each month, and the payments, are due by the 15th of the following month. ## Our Partners Globally ## Calculate Your Employee Costs in Lithuania Enter a gross annual salary to see the employer cost of a Lithuanian employee on a permanent contract: 1.77% employer Sodra on top of gross pay. The employee’s 19.5% Sodra and income tax are withheld from gross, so they do not add to your cost. Fixed-term contracts cost 2.49%. ##### 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](#) ## Know your Lithuanian hiring costs before you commit Tell us the role and the gross salary – we’ll send back the full Lithuanian employer cost and the employee’s net pay, Sodra and income tax included, within one business day. [Get a Custom Payroll Quote](https://topsourceworldwide.com/contact-us/) > “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 , ## Employer Costs in Lithuania Explained A Lithuanian employee on a permanent contract costs 1.77% on top of gross salary in employer Sodra contributions, or 2.49% on a fixed-term contract. The employee pays 19.5% Sodra and income tax out of gross pay, so on a salary of EUR 3,000 the employer pays EUR 3,053 and the employee takes home EUR 1,815. The employer also pays the first two days of sick leave. Here’s the breakdown. #### Sodra contributions on both sides The employer pays 1.77% of gross pay to Sodra for employees on permanent contracts and 2.49% for fixed-term contracts. The rate covers unemployment insurance, workplace-accident insurance and small contributions to the Guarantee Fund and the Long-term Employment Fund. The employee pays 19.5%: 12.52% state social insurance, which funds pensions, sickness and maternity benefits, and 6.98% compulsory health insurance. Employees who joined the second-pillar pension scheme pay an extra contribution on top. Social insurance contributions stop once annual pay reaches 60 times the average wage, EUR 138,729 in 2026, but the 6.98% health contribution continues. For full-time employees paid less than the minimum wage, contributions are calculated on at least the minimum monthly wage, so low-hour roles carry a contribution floor. #### Income tax, the tax-free amount and the 2026 reform From 2026 personal income tax is progressive: 20% on annual income up to 36 average wages, EUR 83,237.40, 25% from there up to 60 average wages, EUR 138,729, and 32% above. The thresholds apply to annual income; employers withhold 20% each month and the higher rates are settled through the employee’s annual declaration, unless the employee asks the employer to apply them during the year. The tax-free amount, NPD, reduces the taxable pay of lower earners. In 2026 it is EUR 747 a month for pay at the minimum wage and falls by 0.49 for every euro above it, reaching zero at about EUR 2,677 a month. It is applied by the employer where the employee asks for it. Sodra contributions are not deductible from taxable income. #### What a Lithuanian employee actually costs At the minimum wage of EUR 1,153 a month the employer pays EUR 20.41 in Sodra, a total cost of EUR 1,173.41, and the employee takes home EUR 846.96. At EUR 3,000 a month the employer pays EUR 3,053.10 in total and the employee nets EUR 1,815 after EUR 585 of Sodra and EUR 600 of income tax. There is no statutory 13th salary. Sick leave is paid by the employer for the first two days, at between 62.06% and 100% of average pay as the employment contract sets, after which Sodra pays sickness benefit directly. The minimum hourly rate is EUR 7.05. #### Registration and monthly filing Each new employee must be registered with Sodra at least one working day before they start. Each month the employer files the income tax return, GPM313, with the State Tax Inspectorate and the social insurance declaration with Sodra, and pays both, by the 15th of the following month. A foreign company does not need a Lithuanian subsidiary to employ someone in Lithuania. It can register as an employer with Sodra and the State Tax Inspectorate and run Lithuanian payroll directly, which is how many EU companies employ their first Lithuanian hire. #### Leave, notice and severance Statutory annual leave is 20 working days for a five-day week, with more for some categories of employee. The Labour Code requires a written contract in Lithuanian. When the employer ends a contract, notice is one month, or two weeks where the employment has lasted under a year. It doubles for employees within five years of retirement age and triples for protected groups, including parents of children under 14. Severance is two months’ average pay, or half a month for employment under a year, and long-serving employees receive an additional benefit from the Long-term Employment Fund. ## Lithuanian social insurance contributions, 2026 | Contribution | Employer | Employee | Applies to | | --- | --- | --- | --- | | Employer Sodra, permanent contract | 1.77% | — | All gross pay | | Employer Sodra, fixed-term contract | 2.49% | — | All gross pay | | State social insurance | — | 12.52% | Gross pay up to EUR 138,729 a year | | Health insurance | — | 6.98% | All gross pay, no cap | ### Income tax and filing dates, 2026 | Item | Amount or rate | Note | | --- | --- | --- | | Income tax up to EUR 83,237.40 a year | 20% | 36 average wages | | Income tax up to EUR 138,729 | 25% | 36 to 60 average wages | | Income tax above EUR 138,729 | 32% | On the excess | | Tax-free amount | Up to EUR 747 a month | Zero from about EUR 2,677 a month | | Monthly tax and Sodra returns | By the 15th | Of the following month, with payment | ### Gross to net and employer cost by monthly salary, 2026 | Monthly gross salary | Employee Sodra | Income tax | Net pay | Employer cost | | --- | --- | --- | --- | --- | | EUR 1,153 | EUR 224.84 | EUR 81.20 | EUR 846.96 | EUR 1,173.41 | | EUR 2,000 | EUR 390.00 | EUR 333.61 | EUR 1,276.39 | EUR 2,035.40 | | EUR 3,000 | EUR 585.00 | EUR 600.00 | EUR 1,815.00 | EUR 3,053.10 | | EUR 5,000 | EUR 975.00 | EUR 1,000.00 | EUR 3,025.00 | EUR 5,088.50 | Permanent contract, tax-free amount applied, no second-pillar pension contribution, income tax at 20%. EUR 1,153 is the 2026 minimum wage. These are TopSource calculations from the verified 2026 rates. Rates, thresholds and statutory amounts shown are for 2026 and were verified on 21 September 2026. The minimum wage, the average wage behind the tax bands and the contribution ceiling are reset every January. This page is general information, not tax or legal advice. [Get a Custom Payroll Quote](https://topsourceworldwide.com/contact-us/) ## How our Lithuanian payroll service works 1. Map your setup We confirm your employer registrations with Sodra and the State Tax Inspectorate, or arrange them if you employ from abroad, then work through contract types, tax-free amount requests, second-pillar pension participation and benefits. 2. Migrate or onboard New employees are registered with Sodra at least one working day before they start. Year-to-date pay is carried across so the tax bands and the contribution ceiling are applied correctly from the first month. 3. Run and review Each period you receive a payroll report for approval before anything is paid: gross to net per employee, employer and employee Sodra, income tax and the tax-free amount, with variances explained. Nothing is submitted, paid or filed until you approve it. 4. File and pay We file the GPM313 income tax return and the Sodra declaration and schedule both payments by the 15th of the following month, and issue payslips to every employee. 5. Stay current Lithuanian payroll resets every January, when the minimum wage, the average wage and the tax bands move. We apply the changes, and re-verify the figures on this page. ## Why TopSource for Lithuanian Payroll TopSource for payroll, Employer of Record or any other of our services represents a simpler, more reliable and transparent option. We don’t hide fees or sneak price increases. We run Lithuanian payroll in-house and file under your own Sodra and tax registrations rather than a bureau’s, so the same team that files your returns answers your calls. You get a named account manager, one consolidated monthly invoice covering salaries, contributions, taxes and fees, and one live Portico view of Lithuania beside every other country we run for you. Portico syncs with your time-tracking, leave and HR systems via API – set up by our onboarding team, not left to yours. GDPR, SOC 2 and ISO 27001 certified. [Global Payroll](https://topsourceworldwide.com/global-payroll/) [Get Started](https://topsourceworldwide.com/contact-us/) ## Other services Accelerating your growth in Lithuania and beyond #### TopSource goes far beyond payroll, acting as your end-to-end partner in global workforce management. From Employer of Record (EOR) services and seamless entity setup to localized accountancy and fractional HR support, we cover every aspect of international employment. ### Global Employer of Record (EOR) services With our Global EOR services, you can hire talent in any country without establishing a legal entity. We handle employment contracts, payroll, benefits, and compliance on your behalf, enabling fast, risk-free global expansion. ### Actionable HR Advisory On demand access to our fractional and regional HR professionals who understand local laws, cultures, and best practices. Bespoke talent intelligence including salary, business and talent market benchmarking. ### Global entity management Our global entity management team helps you establish and maintain your corporate entities worldwide. We ensure full compliance with local laws and regulations, streamline administrative processes, and minimize risk — so you can focus on growing your business. ### Accounting We offer comprehensive accounting solutions tailored to meet your international needs. From bookkeeping and financial reporting to tax filings and audits, our services help you maintain transparency, accuracy, and compliance in every jurisdiction. ## Meet our experts for Lithuania Whether you’re entering the market or scaling operations, our specialists provide the insight and guidance you need to succeed in one of the world’s most dynamic and regulated employment landscapes. With TopSource, you’re backed by real experts, every step of the way. [Our People](https://topsourceworldwide.com/our-people/) ## Beyond a payroll service **A globalization accelerator** A payroll platform for your employees is just the beginning. We are constantly evaluating your entire organisation to identify compliance issues and ways to accelerate your global growth. - [Payroll platform](#) - [Audit](#) - [Intelligence](#) - [Advisory](#) ##### Payroll platform ###### Global payroll simplified Your intuitive hub for paying global teams. Simple, powerful, and designed to scale with you — no complexity, just clarity. ##### Audit ###### Eliminate barriers to growth Avoid compliance issues across your global workforce and uncover opportunities to improve profitability. On a quarterly basis we’ll help you audit your global talent strategy to ensure it aligns with your business goals. ##### Intelligence ###### Build a data-driven talent strategy Grow confidently and profitably with access to the latest TopSource insights & data on hiring markets, salary benchmarking & benefits. ##### Advisory ###### Expert guidance that turns complexity into clarity. Whether you’re managing a global acquisition or entering a new market, you get clear guidance to navigate complex decisions, avoid delays, and accelerate your global expansion. ## Lithuanian payroll FAQs ### How much are employer contributions in Lithuania? Employer Sodra contributions are 1.77% of gross salary for permanent contracts and 2.49% for fixed-term contracts in 2026. The employee pays 19.5% Sodra out of gross pay, which is why Lithuania has one of the lowest employer costs in the EU. ### What are the income tax rates in Lithuania in 2026? From 2026 income tax is progressive: 20% on annual income up to EUR 83,237.40, 25% up to EUR 138,729 and 32% above that. Employers withhold 20% monthly, and the higher rates are normally settled through the employee’s annual declaration. ### What is the tax-free amount (NPD) in Lithuania? The tax-free amount reduces taxable pay for lower earners. In 2026 it is EUR 747 a month at the minimum wage and falls by 0.49 for each euro of pay above it, reaching zero at about EUR 2,677 a month. The employer applies it where the employee requests it. ### What is the minimum wage in Lithuania in 2026? The minimum monthly wage is EUR 1,153 from 1 January 2026, and the minimum hourly rate is EUR 7.05. For full-time employees paid below the minimum wage, Sodra contributions are calculated on at least the minimum monthly wage. ### Is there a cap on social security contributions in Lithuania? Yes. Social insurance contributions stop once annual pay reaches 60 times the average wage, EUR 138,729 in 2026. The 6.98% health insurance contribution has no cap and continues on all pay. ### When are payroll taxes due in Lithuania? The monthly income tax return, GPM313, and the Sodra declaration are due by the 15th of the following month, and the tax and contributions must be paid by the same date. New employees must be registered with Sodra at least one working day before they start. ### Can a foreign company employ someone in Lithuania without an entity? Yes. A foreign company can register as an employer with Sodra and the State Tax Inspectorate and run Lithuanian payroll without a local subsidiary. TopSource handles the registrations, the monthly filings and payment, or can employ the person through our Employer of Record service. ### Who pays sick leave in Lithuania? The employer pays the first two days of sick leave at between 62.06% and 100% of average pay, as the employment contract sets. From the third day Sodra pays sickness benefit directly to the employee. ### How much annual leave do employees get in Lithuania? The statutory minimum is 20 working days a year for employees working a five-day week, with longer leave for some categories of employee. Public holidays are paid in addition. ### What notice period applies in Lithuania? An employer must give one month’s notice, or two weeks where the employment has lasted under a year. Notice doubles for employees within five years of retirement age and triples for protected groups. Severance is two months’ average pay, or half a month for employment under a year. [Couldn’t find what you were looking for?](/contact-us/) ## Looking at other markets too? We help organizations employ and pay teams in 164 countries. 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United States dollar](https://topsourceworldwide.com/global-payroll/puerto-rico/) [Qatar Capital: Doha Currency: Riyal](https://topsourceworldwide.com/global-payroll/qatar/) [Romania Capital: Bucharest Currency: Romanian Leu](https://topsourceworldwide.com/global-payroll/romania/) [Rwanda Capital: Kigali Currency: Rwandan franc](https://topsourceworldwide.com/global-payroll/rwanda/) [Saint Kitts & Nevis Capital: Basseterre Currency: East Caribbean dollar](https://topsourceworldwide.com/global-payroll/saint-kitts-nevis/) [Saint Lucia Capital: Castries Currency: East Caribbean dollar](https://topsourceworldwide.com/global-payroll/saint-lucia/) [Saint Maarten Capital: Philipsburg Currency: Netherlands Antillean guilder (ƒ)](https://topsourceworldwide.com/global-payroll/st-maarten/) [Saint Vincent & the Grenadines Capital: Kingstown Currency: East Caribbean dollar](https://topsourceworldwide.com/global-payroll/saint-vincent-the-grenadines/) [Saipan Capital: Capitol Hill Currency: U.S. Dollar](https://topsourceworldwide.com/global-payroll/saipan/) [San Marino Capital: City of San Marino Currency: Euro](https://topsourceworldwide.com/global-payroll/san-marino/) [Saudi Arabia Capital: Riyadh Currency: Riyal](https://topsourceworldwide.com/global-payroll/saudi-arabia/) [Senegal Capital: Dakar Currency: West African CFA franc](https://topsourceworldwide.com/global-payroll/senegal/) [Serbia Capital: Belgrade Currency: Serbian dinar](https://topsourceworldwide.com/global-payroll/serbia/) [Seychelles Capital: Victoria Currency: Seychellois Rupee](https://topsourceworldwide.com/global-payroll/seychelles/) [Slovakia Capital: Bratislava Currency: Euro](https://topsourceworldwide.com/global-payroll/slovakia/) [Slovenia Capital: Ljubljana Currency: Euro](https://topsourceworldwide.com/global-payroll/slovenia/) [Solomon Island Capital: Honiara Currency: Solomon Islands Dollar](https://topsourceworldwide.com/global-payroll/solomon-island/) [South Korea Capital: Seoul Currency: Won](https://topsourceworldwide.com/global-payroll/south-korea/) [South Sudan Capital: Juba Currency: South Sudanese Pound](https://topsourceworldwide.com/global-payroll/south-sudan/) [Sri Lanka Capital: Colombo Currency: Sri Lankan Rupee](https://topsourceworldwide.com/global-payroll/sri-lanka/) [Sudan Capital: Khartoum Currency: Sudanese Pound](https://topsourceworldwide.com/global-payroll/sudan/) [Sweden Capital: Stockholm Currency: Swedish krona](https://topsourceworldwide.com/global-payroll/sweden/) [Taiwan Capital: Taiwan Currency: Dollar](https://topsourceworldwide.com/global-payroll/taiwan/) [Thailand Capital: Bangkok Currency: Thai Baht](https://topsourceworldwide.com/global-payroll/thailand/) [Trinidad & Tobago Capital: Port of Spain Currency: Trinidad and Tobago dollar](https://topsourceworldwide.com/global-payroll/trinidad-tobago/) [Tunisia Capital: Tunis Currency: Tunisian Dinar](https://topsourceworldwide.com/global-payroll/tunisia/) [Uganda Capital: Kampala Currency: Ugandan Shilling](https://topsourceworldwide.com/global-payroll/uganda/) [US Virgin Island Capital: Charlotte Amalie Currency: Dollar](https://topsourceworldwide.com/global-payroll/us-virgin-island/) [Venezuela Capital: Caracas Currency: Venezuelan bolívar](https://topsourceworldwide.com/global-payroll/venezuela/) [Zambia Capital: Lusaka Currency: Zambian Kwacha](https://topsourceworldwide.com/global-payroll/zambia/) [Zimbabwe Capital: Harare Currency: Zimbabwean Dollar](https://topsourceworldwide.com/global-payroll/zimbabwe/) Load more