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.
TopSource rated 5/5 by our customers
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.
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 expertLithuania
| British Pound | Lithuania | |
|---|---|---|
| Base Salary (per month) | ||
| Employer Contributions | ||
| Total Cost (Annual) | ||
| Total Cost (Monthly) |
“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.”
“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.”
“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.”
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.
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.
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.
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.
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.
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.
How our Lithuanian payroll service works
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.
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.
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.
Beyond a payroll serviceA globalization accelerator
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
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Looking at other markets too?
We help organizations employ and pay teams in 164 countries.
