Employer of Record in Lithuania

Our next EOR country in review series — Lithuania — is a member of the European Union and has one of the largest economies in the Baltic States, as well as the highest GDP per capita. An increasing number of job seekers are migrating to this country in order to take advantage of the expanding economy.

Despite being hit by the Great Recession, Lithuania’s economy recovered more quickly than the rest of the EU and has subsequently experienced growth. In 2019, Lithuania’s labor force participation rate reached an all-time high of 62.20 percent.

Lithuania handled the CovidD-19 pandemic admirably, resulting in a GDP decrease of only 0.8 percent in 2020. Exports, private consumption, and a decreased reliance on tourism all contributed to Lithuania’s GDP remaining constant in comparison to other countries. Lithuania’s GDP is predicted to grow by 3.2 percent by 2022, according to the International Monetary Fund (IMF), although the European Commission’s predictions are more conservative (3 percent and 2.5 percent, respectively) due to the unpredictable global scenario.

Top Skills in Lithuania

Lithuania benefits from its position as Europe’s geographical centre. It is rapidly disproving the stereotype of a growing market and establishing itself as a significant global exporter of high-value goods. The following industries are actively recruiting in Lithuania:

  • Petroleum refining
  • Food processing
  • Energy sources
  • Chemicals
  • Furniture
  • Products made of wood
  • Textiles and apparel

Lithuania’s IT sector has been growing steadily, resulting in a workforce available for hiring in the same field. Lithuania has human resources available for positions such as sales and business development, project management (technology), marketing, public relations and media relations, data analytics, software engineering, and design.

Vilnius and Kaunas are the hubs for the majority of Lithuania’s information technology enterprises. Vilnius is the country’s largest IT centre, and as a result, Vilnius app development is gaining popularity.

Wages

Employees from the Baltic nations are well-qualified to work in a variety of industries and in a variety of professions. IT specialists, engineers, transportation specialists, and customer support professions are all common. In recent years, we’ve observed an increase in the average salary paid to members of these nation states.

They are nonetheless extremely affordable in comparison to comparable employees in other European countries. For instance, in Q1 of 2018, the average monthly wage in Estonia was 1242 euro. It was 961 in Latvia and 642 euro in Lithuania. Thus, when it comes to value for money, the Baltic region is a no-brainer. Additionally, it’s beneficial to discover labor that is enthusiastic about developing and increasing in value. See Acvian’s payroll estimator for every country specifics.

Date of salary payment

Salaries are paid monthly and must be received by the tenth day of the following month.

Salary

In Lithuania, the minimum pay for a full-time employment is 642 euro per month.

Bonus

Although a 13th-month wage payment is not required by law, it is common for certain employers to provide it as a bonus.

Social security system

In Lithuania, the social security system (SODRA) provides coverage for healthcare, pensions, and other mandatory benefits such as sick pay and maternity leave. Contributions should be deducted from an employee’s salary on a monthly basis:

Pension — 8.72

Sickness — 2.09

Maternity — 1.71

Health-6.98

Total-19.5%

Pension

The mandatory pension contribution is 8.72 percent of an employee’s pay and is deducted monthly as part of the employee’s social security contributions. Employees may elect to engage in an optional pension accumulation scheme in addition to the statutory amount. Additionally, this amount will be deducted from an employee’s monthly salary at the rate selected by the employee.

Probation Period

In Lithuania, the normal probationary time is three months, however it might be shorter. The employer may also extend the duration if deemed necessary.

Working hours

A full-time job is defined as eight hours per day, 40 hours per week.

Overtime

Overtime is often compensated at a rate of 150 percent of the regular hourly rate. If overtime is required between the hours of 10 p.m. and 6 a.m., the overtime hours shall be paid at a rate of 200 percent of the employee’s regular hourly rate.

Weekly overtime is limited to eight hours and may be increased to twelve hours with the employee’s consent. Annual overtime is limited to 180 hours and must not be exceeded.

Termination

Lithuanian labor regulations governing termination are complicated and are decided by the grounds for termination. Contracts can be canceled mutually or by either the employer or employee.

Risks

Numerous talented people are fleeing the country in search of work overseas. Lithuania’s skills shortage continues to be severe, posing a major impediment to the country’s prosperity. While Lithuanian businesses have gradually embraced the benefits presented by various digital technologies, their progress has been slower than in past years.

How to hire employees in Lithuania?

Employer of Record (EOR) – is an intermediary between the employee and company. In other words, you can hire your talents through a country EOR agent and run your business as usual.

The EOR provider has a legal entity to manage local payroll, employment and immigration, and whatever is required for successful outsourcing. A specific feature that Avian provide is also our payroll cost calculator.

Being your professional employment provider Acvian will take care of your workforce overseas and all HR related questions:

  • Employee onboardings
  • Local agreement drafting and approval
  • Payroll setup and calculation
  • Wages payment and payslips providing
  • Benefits compensation and expenses reimbursement
  • Tax filing
  • Legal consultancy

Contact the Acvian team today and learn what it will take to hire your talents. With our reach in 118 countries and a strong network system, we can make your global outsourcing happen much sooner and at a lower overall cost.

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