Lithuanian Time Zone (GMT+03:00)

Undoubtedly, payroll is a critical process for any organization. The pay cycle refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.

The payroll frequency in Lithuania is typically monthly. An employer must pay salaries by the 10th of the following month.

13th-month payments are not required by law in Lithuania; however, it is common for employers to pay a performance-based bonus.

Effective January 1, 2025, the minimum wage in Lithuania will increase to €1,038 per month and €6.35 per hour.

The standard working week in Lithuania consists of 40 hours, 8 hours per day.

All work above the standard 40 working hours per week is paid as overtime and regulated by the employment contract/collective agreement. An employee can work a maximum of 8 overtime hours over seven consecutive days. With written employee consent, the maximum can rise to 12 hours per seven consecutive days.

All overtime hours are paid at an overtime compensation rate: 150.00% of the employee's regular pay rate. If the overtime is performed at night between 10:00 pm and 6:00 am, the employee should receive compensation of 200.00%.

Working Week: Monday-Friday

The Personal Data Protection Law provides no specific retention period for personal data. However, specific Lithuanian laws may provide for minimum (or maximum) retention periods, including:

• Contracts for goods, works, services, and acts of acceptance of goods, works, and services must be kept for ten years upon the expiration of the contract (The Office of the Chief Archivist of Lithuania Order No. V-100 of 9 March 2011) (only available in Lithuanian here) ('the Order No. V-100'));
• An employment contract must be kept for 50 years upon the expiration of the agreement ('the Order No. V-100'); and
• Annual financial and budget implementation reports (sets of reports, etc.) must be kept for ten years ('the Order No. V-100').

EU/EEA citizens do not require work permits in Lithuania. However, if the employee (and their families) stays in Lithuania for over three months within six months, they must obtain a certificate attesting to their right to stay.

The following information must be provided during the onboarding process:

• Name (matching the account where you'll deposit their pay).
• Date of Birth
• Date of Hire
• Contact information, including their mailing address in Lithuania.
• Lithuanian personal ID/tax identification number
• Bank account information.
• Amount to be paid in euros
• Forms to register the employee with the State Social Security Fund (SODRA).
• Forms to register employees with the State Tax Inspectorate (VMI).

The employer must send out an employment agreement outlining essential working conditions such as type of work, position, location of work, working days and hours, monthly salary, date work starts, and probation or trial period.

Probation periods are not mandatory in Lithuania; however, standard practice is a probation period of 3 months.

There are 16 public holidays.

• 1 January - New Year's Day
• 16 February -  Independence Restoration Day
• 11 March - Independence Day/National Day
• 9 April - Easter Sunday
• 10 April - Easter Monday
• 1 May Labour Day
• 7 May Mothers' Day
• 4 June - Fathers' Day
• 24 June - St John's Day/Day of Dew
• 6 July - King Mindaugas’ Coronation Day
• 15 August - Feast of the Assumption of Mary 
• 1 November - All Saints' Day
• 2 November - All Souls' Day
• 24 December - Christmas Eve 
• 25 December - Christmas Day
• 26 December - Second Day of Christmas

Lithuania's annual leave entitlement depends on the employee's years of service; the standard entitlement is 20 working days of paid annual leave. One installment of leave must be at least ten working days. Unused leave can be carried over.

Following the completion of 10 years of service with a single employer, the employee is entitled to an additional three days of paid leave. An additional day's leave is accrued every five years after that.

In Lithuania, the employer is responsible for paying the first two days of illness at a benefit rate of 62.06% to 100% at their discretion and as specified in the employment contract. From the third day of illness, the employee will receive 62.06% of their regular salary paid by the National Social Insurance Fund (SODRA).

Sick pay is paid only for the working days.

Should an employee take incapacity for work absence to care for a patient, they will be entitled to a payment of 65.94% paid directly by SODRA.

Employees are entitled to 126 days of paid maternity leave, which is compensated by social security if the employee is eligible. The maternity benefit equals 77.58% of the employee's standard pay rate. The minimum maternity benefit per month cannot be less than 242 EUR (calculation based on six basic social insurance benefits valid for the last quarter before the right to maternity benefit commenced).

In the case of multiple or complicated births, an additional two weeks of leave is granted.

Fathers/parents are entitled to 30 days of paid paternity leave, which they must take in the first three months of the child's birth and can be split into up to two parts. If he is eligible, the father will receive the same social security benefits as the mother at 77.58% of their regular earnings.

Each parent can take a two-month non-transferrable period of paid childcare (parental) leave. The remaining part of childcare (parental) leave can be shared among the parents according to the family's needs. The non-transferable part of childcare leave can be taken all at once or in parts. However, it cannot be taken by both parents simultaneously.

Parental leave starts after maternity leave and continues until the child turns one, and is paid 77.58% of the employee's salary. Parental leave can also be extended until the child turns two, at a pay rate of 54.31% for the first year and 31.02% for the second year. The third year is unpaid leave. Parental leave is paid by SODRA. The birth mother's partner in a same-sex couple is not eligible for parental leave. In the case of adoption, the maximum duration of parental leave is two years.

As of August 2022, Employees with one child under the age of 12 will be granted one additional paid day of rest every three months or a reduction in the working time of 8 hours every three months. A request must be submitted to the employer to grant Mother's Day/Father's Day each time. For the first time, before the parental day is granted, the employee must submit the children's birth certificates."

Bereavement leave: Employers must give employees three days of unpaid leave upon the death of a family member.

In Lithuania, the standard notice period is 30 days for all employees with a minimum of one year's service. For employees with less than one year of service, the notice period is two weeks.

Employees with less than five years left until the statutory age of pension shall have the notice period doubled.

The notice period may also be subject to an increase where the employee is raising a child under the age of 14, raising a disabled child under 18, or for employees entitled to the retirement pension in 2 years.

Employees with 12 months or less of service are entitled to half of the average monthly salary. The severance pay entitlement is two months for an employee who served more than one year and less than 20 years. Employees who have completed 20 years of service are entitled to six months of salary. Severance pay is calculated based on the average salary figure.

Lithuania's immigration system provides several options for employers of foreign nationals. Lithuania is a member of the European Union (EU) and the Schengen Area. Requirements, processing times, employment eligibility, and benefits for accompanying family members vary by permit type.

Business visitors to Lithuania typically use a local version of the Schengen C Visa unless they are visa-exempt based on their nationality. The stay under a Schengen Visa is limited to 90 days over a period of 180 days, counted cumulatively across the entire Schengen Area.

The main work authorization categories are the EU Intra-Company Transferee (ICT) Permit, suitable for transfers of managers, specialists, and trainees and issued for up to three years, and the EU Blue Card, ideal for highly skilled local hires and issued for up to three years.

In Lithuania, it isn't mandatory to run background checks on employees, but Lithuanian employers can choose to do limited screening under current regulations.

In Lithuania, you can conduct different background screenings based on a new hire's role. Here are the most common types and a few other background checks you can consider (more on each one below).

• Common background checks
• Employment history
• Personal reference check
• Work Authorization
• Education History

Less common background checks, usually made depending on the role

• Credit reports
• Social media profiles
• Driving records
• Medical records
• Criminal records