Lithuania may not be top-of-mind for every business hiring remote talent. But those who’ve taken the time to research the skilled labor force and economic advantages the country has to offer know that it’s worth taking a closer look at Lithuania.
From a historical perspective, the country dates back nearly 10,000 years and was once the largest country in Europe.
Today, the historic center of Vilnius, the capital city, is designated as a UNESCO heritage site. The incredible history and picturesque landscapes — including beautiful coastlines, forests, and lakes — make Lithuania a desirable location to visit and work.
And from a business perspective, Lithuania is definitely an up-and-coming region worth exploring.
Advantages of Hiring in Lithuania
Lithuania’s government is investing in training and educational opportunities for its citizens so they can become more viable on the world stage. As a result, skilled employees in areas like tech, finance, and engineering are increasingly easier to find.
Here are a few high-level facts about Lithuania:
- Language: Lithuanian
- Currency: Euro (EUR)
- Capital City: Vilnius
- Population: 2.8 Million
- Cost of Living Rank: 53rd
Highly Educated Population
In Lithuania, around 30% of the population between the ages of 24 and 64 possess bachelor’s degrees, and most of the workforce is fluent in English, up-to-date on current business best practices, and possess the flexibility needed to adapt to evolving business needs.
Strong Technology Sector
Lithuania is home to a thriving tech scene, including Tech Zity. This hub provides innovators in multiple industries a place to develop ideas, grow their businesses, and create success stories. Primarily based in the capital city of Vilnius, there are also locations in Druskininkai and Klaipėda.
Access to Tech Zity office space and events like hackathons makes it easier for remote technology workers to launch their careers. There are even incentive programs, like the Startup Visa, that streamlines the process for entrepreneurs to join the Lithuanian tech startup ecosystem.
Hiring Compliantly in Lithuania
Employment Contracts
Written contracts are a must for all employees in Lithuania. Contracts can be indefinite or for a fixed-term of either two or five years. The number of fixed-term contracts can’t exceed 20% of a company’s total contract amount.
All employment contacts must include the following information:
- Job location
- Responsibilities
- Compensation
- Benefits
- Probation period
- Termination requirements
Probation periods can’t last longer than three months, and employers can terminate employees with as little as three day’s notice within that timeframe.
Working Hours & Pay
The current minimum wage in Lithuania has been rising steadily over the last few years and is at €924 per month as of 2024.
Work weeks are limited to 40 hours, which breaks down to five eight-hour shifts. People in specific industries, like healthcare, can work up to 24 consecutive hours. It’s also important to note that overtime is generally not permitted under Lithuanian law.
When it is, overtime cannot exceed 48 hours in seven days, four hours over two consecutive days, or 120 hours per year.
Taxes
In Lithuania, payroll contributions are divided between the employer and the employee. The employer contributes 1.7% to social security for indefinite-term contracts and 2.49% for fixed-term contracts.
Employee contributions depend on income level. For income levels under €114,162, employees contribute 19.5% to social insurance and pay a 20% tax rate. For income levels over €114,162, employees contribute 6.98% to social insurance and pay a 32% tax rate. The increased rates are only paid on income over €114,162 for those in the higher income bracket.
Termination Process & Severance Pay
When ending employment contracts, employers must give employees one month’s notice unless the reason for termination is the employee’s fault. The notice period drops to two weeks for employees who’ve been with the company for less than a year.
Severance depends on an employee’s length of time with the company. For example, employees who’ve worked for the company for less than a year are entitled to one average month’s salary. If they’ve been with the company for more than a year, they’re entitled to the equivalent of two months’ pay.
Additionally, an employee may be entitled to long-term employment benefits through SODRA, Lithuania’s social security program.
Paid Leave
Vacation and Holiday
Lithuanians are granted 13 paid days off for national holidays. In addition, Lithuanian employees are entitled to an additional four weeks (20 days) of paid vacation that must be taken in 14-day blocks. Employees who work six days a week receive 24 days.
Employees who are disabled, children under the age of 18, or single parents with children under 14 are entitled to 35 days. Finally, employees who work in challenging situations get 41 days of PTO.
Sick Leave
There is no cap on how many sick days an employee can take. However, the amount of time needed determines who pays for the time off. In all circumstances, the employer is responsible for covering the first two days at a rate of no less than 62.06% of an employee’s total wage.
After the first two days, SODRA covers sick leave at the same rate.
Parental Leave
In Lithuania, mothers are allowed to take up to 126 days of maternity leave, which is divided into 70 days before birth and 56 days after.
Fathers are entitled to 30 days of paternity leave after their child is born. Leave is paid through SODRA, and grandparents or other relatives who serve as primary caregivers for newborns are eligible for parental leave benefits too.
Employment Laws in Lithuania
Lithuanians are also entitled to:
- Bereavement leave
- Education leave
- Creative leave
- The right to request remote work
- Protections against discrimination
- Protection if the business they work for is sold
- Continuous training benefits
Why Digital Nomads Love Lithuania
Lithuania benefits from being a part of the European Union (E.U.) and the Schengen Zone, which means that digital nomads who touch down anywhere in Europe gain access to Lithuania as part of their 90-day E.U. visa.
Lithuania doesn’t currently offer a digital nomad visa, but citizens of the E.U. can move around freely, and citizens from select countries like Canada, New Zealand, and Japan can apply for a long-term visa.
There isn’t a substantial digital nomad community in Lithuania yet, which makes it easier for early arrivals to lay claim to some of the more desirable places to live and work.
This includes businesses like Tech Zity, which offers both co-working and co-living spaces — providing digital nomads with basically everything they might need to get established in Lithuania.
Confidently Hire in Lithuania with RemoFirst
The best way to start hiring in a new country is by working with a partner with experience and knowledge of that particular market. Partnering with an Employer of Record (EOR) like RemoFirst gives you access to experts who can navigate the system on your behalf to ensure your business fully complies with local employment laws.
Contact us today to book your demo and learn how we can help you get started in countries like Lithuania.
