Country Guide
Employer of Record in Lithuania
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Employer Taxes
Employee Costs
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Expanding to Lithuania? EOR Services Help You Hire Globally, Pay Locally, Expand Effortlessly
INS Global offers a powerful Employer of Record (EOR) solution in Lithuania, enabling businesses to expand to over 160 countries swiftly and cost-effectively. Our strategic approach cuts through traditional international hiring barriers.
By acting as your legal employer, we handle complex HR responsibilities and compliance requirements, transforming global workforce management into a seamless process. Our expertise ensures comprehensive coverage of local employment regulations.
This approach empowers companies to establish international operations in just 48 hours, providing a nimble, efficient pathway to global talent acquisition.
With INS Global’s EOR services, businesses can focus on growth while we manage the intricate details of cross-border employment.
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Why Choose A EOR in Lithuania Over Company Incorporation?
Incorporating a company in a foreign country is a complicated and time-consuming process that requires a legal and physical presence in that market. A EOR streamlines this process and allows you to operate in new markets without establishing a formal entity there.
Working with a EOR…
- Saves time
- Saves money
- Ensures legal compliance
- Leverages local experience and expertise
PEO/EOR vs Company Incorporation
The Advantage in Figures
| PEO/EOR | Company Incorporation | |
|---|---|---|
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Price |
80% Less Expensive |
|
|
Market Entry |
2-5 Days |
6 Months |
|
Employee Turnover |
Decrease by 14% |
|
|
Recommendation |
98% of the Current PEO Clients |
|
|
Administrative Fees |
Saves an Average of $450 |
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|
Costly Payroll and Compliance Fines |
Help Avoid |
|
|
Company Growth Rate |
7 – 9% |
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ROI |
27% |
|
|
Closed During Pandemic |
-58% |
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|
|
|
|
PEO/EOR
Company Incorporation
Price
80% Less Expensive
Market Entry
2-5 Days
6 Months
Advantages of EOR Services
Focus on Company Growth
EORs allow you to outsource your payroll, recruitment, headhunting, and even contractor management with a simple and elegant solution. This empowers your company to focus on expanding abroad with a local partner that understands the market.
Expand Efficiently
When you expand abroad with a EOR, you can drastically reduce the time needed to launch in a new market. While starting a new entity abroad can take anywhere between 4 to 12 months, working with a Employer of Record streamlines the process to under a week.
Ensure Legal Compliance
EORs have local experience and knowledge to help meet even the most complex national and regional regulations. This ensures that you’re compliant with every aspect of local labor law in a simple, efficient, and cost-effective way.
Save Money and Time
Working with a EOR allows you to outsource your HR and prevent costly fees and fines when entering a new market. The local expertise helps keep you compliant while cutting through red tape and saving you from costly errors.
Streamlined HR in One Platform
A EOR handles every aspect of HR and simplifies everything through a single platform. INS Global offers a streamlined, cloud-based solution that lets you control every aspect of your HR, from anywhere in the world.
How Does A EOR In Lithuania Work?
INS Global’s EOR manages employee recruitment and management in four simple steps.
1
We work with you to discuss your plans and formulate a strategy that best serves you.
2
Our organization provides a legal entity that enables you to employ staff in Lithuania.
3
We handle all HR-related tasks, such as hiring and payroll, to ensure legal compliance.
4
Your staff continues to work towards your success while we handle the HR.
INS GUIDES
Check Our Australia Labor Law Guide
Labor Law in Lithuania
Employment Contracts in Lithuania
- Employment in Lithuania should be accompanied by a written offer of employment and a contract between the employer and the employee.
- Employers may include a probation period of employment for the first 3 months.
- Employers can terminate an employee without severance within the probation period.
- An employment contract should include the type of agreement made between the employee and the employer. This can be fixed-term, project-based, temporary employment, or seasonal employment.
- Termination without fault requires a 1-month notice period in Lithuania, and severance pay is typically equivalent to 1-2 month’s salary.
- An employer can terminate the employment contract without notice if the employee has demonstrated behavior found to be in serious breach of the rules and regulations set by the employer.
Working Hours
- Lithuanian labor law states that the working week runs from Monday to Friday.
- Full-time employees are expected to work a maximum of 8 hours per day, 5 days a week.
- Overtime is permitted at a higher hourly rate of 150% or 200% for night work.
- The maximum working hours per week, including overtime, should not exceed 48 hours.
- During the working day, employees are entitled to a break no more than 5 hours into a shift.
Types Of Leave
Holidays and Annual Leave
- Lithuania has a list of 15 official national holidays when most employees are entitled to a day off with pay if the day falls during the work week.
- Employees may be entitled to additional holidays per calendar year according to the employment agreement they signed or the CBA which affects their industry.
- The scheduling of holidays is legally subject to the employer, considering the needs of the business and the preferences of the employees.
Sick Leave
- Lithuanian labor law outlines that all employees are entitled to sick leave when they are unable to work due to illness.
- Employees must notify their employer as soon as possible, preferably before the start of the working day.
- In most cases, employees must produce a medical certificate as proof of their illness when returning to work.
- The duration of allocated sick leave depends on the illness. However, employees can expect 60%-100% pay for the first two days of sick leave, with social security providing 62% of standard pay for sick leave beyond this.
Parental Leave
- Lithuanian labor law states that female employees are entitled to maternity leave of 126 calendar days (18 weeks).
- The start of maternity leave should begin 70-100 days before the expected date of childbirth.
- After maternity leave, employees have the right to return to work in their previous position or an equivalent option.
- Male employees are also entitled to 30 calendar days of paternity leave, taken within the first 2 months of childbirth.
Tax Law
- Employers in Lithuania are responsible for deducting payroll taxes and any other social contributions from payroll. Employees must contribute an amount equivalent to 19.5% of their gross salary plus any additional pension fund amounts (2-3%), and employers are expected to contribute an equivalent of 0.32%.
- Income tax is calculated nationally at 20% for amounts below EUR 101,094 per calendar year and 32% for amounts above this.
- Employees are responsible for reporting income and filing annual tax returns.
- The corporate tax rate in Lithuania is 15%.
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Frequently Asked Questions
faqs
No, it’s necessary to use a local entity to employ staff to comply with local labor laws.
Foreign companies can be set up in every country, but you can make use of local PEO services to hire local staff directly.
The liabilities of the Employer of Record can vary from one country to another. However, these responsibilities cover liability for all staff management tasks including payroll management, tax compliance, social security management, and hiring procedures.
Expanding abroad can take a matter of days with a PEO. Lithuania has a company incorporation process which can take anywhere from 4 to 12 months.
EORs offer you a safe, legal way to expand abroad in a fraction of the time. This option is completely legal and helps save you time and money, allowing you to focus on growing your business internationally.
Salaries and payroll in Lithuania are typically paid twice per month. However, some companies prefer to pay monthly. Employers are responsible for deducting payroll taxes and other social contributions on behalf of their staff.
Recruiting and employing new workers in Lithuania includes more than just paying a monthly salary. Working with a EOR streamlines the entire process, drastically reducing recruitment costs.
Yes. While some districts may have varying rules and regulations, a local PEO has the experience and knowledge to hire staff everywhere in Lithuania.
All changes to employment contracts in Lithuania have to be agreed upon with the employee in question. Working with a local PEO in Lithuania makes this process seamless by handling all the paperwork and HR-related tasks for you.
Employers in Lithuania are responsible for creating a safe working environment, managing payroll deductions, and ensuring that all employment contracts meet national standards.
Yes. Employers in Lithuania are responsible for deducting payroll taxes and other social contributions every month.
While some EORs may have minimums and maximums that you can employ abroad, INS Global builds a service package that caters to your exact needs. We can provide HR for as many or as few workers as you need for your expansion strategy.
The cost to fire an employee can vary depending on the reason for their termination. Severance pay of up to 6 months may be required if the employee hasn’t done anything wrong and is fired unjustly.
Both in-person and remote work options are available in Lithuania. This can help speed up your expansion without having to worry about the costs of running an office yet.
Absolutely! Our recruitment experts have the experience needed to find the right talent for your business. While recruitment is usually expensive, INS Global streamlines the process so that you can expand your business efficiently.
There are 15 paid national holidays in Lithuania, with employees also getting an hour off the day before every holiday. If an employee works on a national holiday, they are entitled to double pay.
Lithuania has many worker protections included in its labor laws to help improve the working environment in the country. While this is not perfect yet, major improvements have been made over the last few years.
Employers in Lithuania must navigate complex labor and business regulations to stay compliant. This is why it’s always a great idea to work with a local EOR in Lithuania which has the knowledge and expertise to guide you in the right direction.
A Global Employer of Record is an effective solutions for companies like yours that are looking to expand a workforce abroad effortlessly.
This approach allows you to outsource the international hiring process quickly and efficiency, providing access to a global talent pool while still managing payroll compliance in each country.
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