Hiring in Lithuania

The contract sets out role, salary in EUR, working time, leave, notice and any restrictive covenants. The EOR is the counterparty to the employee, which is what removes the need for your own entity.

Lithuanian is the required contract language, so most EORs issue a bilingual Lithuanian and English version.

Fixed-term contracts are permitted, but for permanent work they are capped at 20% of an employer's contracts and carry a higher employer contribution, so most EORs default to indefinite terms.

Set probation from day one. It cannot be extended by agreement, although time the employee is absent through illness or leave does not count towards it.

Some EORs shorten probation as policy because they, not you, carry the dismissal risk. Ask before you agree a start date.

Overtime is paid at no less than 1.5 times the hourly rate, rising to 2 times on unscheduled rest days or at night and 2.5 times on public holidays. It is capped at 8 hours a week, or 12 with written consent, and 180 hours a year.

Senior hires are not carved out, so overtime stays a statutory matter at every level. Keep accurate working time records either way.

Market practice for professional roles sits close to the statutory 20 days, so the legal minimum is a fair figure to budget on. Three of the public holidays always fall on a Sunday, so fewer working days are lost than the count suggests.

The employer pays the first two days of sick leave at 62.06% to 100% of average pay, and Sodra pays from day three. Maternity, paternity and childcare benefits are paid by Sodra, not the employer, so confirm the EOR handles the claims.

Dismissal needs a statutory ground, such as redundancy, poor results, the employee's fault or the employer's will. Severance is set by the Labour Code: two months' average pay after a year of service, half a month's below that, and at least six months' pay for dismissal at the employer's will on 3 working days' notice.

The EOR runs the process as the legal employer and will want the paperwork in order, including final pay, unused leave and severance. Unfair dismissal claims go to the Labour Disputes Commission within one month, so keep a documented reason.

Private health insurance is a common perk for professional roles even though it is not mandatory.

EORs often bundle benefits through a group scheme. Ask what is included in the fee and what is billed on top.

Employer contributions add around 1.77% on top of gross salary for indefinite contracts and 2.49% for fixed-term ones. That is before the EOR fee. The employee's 19.5% social insurance and income tax at 20%, 25% or 32% come out of gross.

Sodra registration is the trap. The employer must notify Sodra before the employee starts, and work begun without that notice counts as undeclared work, so build it into the onboarding timeline.

Ask whether the EOR sponsors directly or refers to a partner. A partner-model EOR often cannot sponsor at all, and the trading-history, tax-debt and compliance checks apply to the sponsor, not to you. An annual national quota also applies unless the hire qualifies for a Blue Card or clears a salary threshold.

Set start dates after approval, not before.

Get the data processing terms in the service agreement, not just the privacy notice. Transfers outside the EEA need an adequacy decision or standard contractual clauses.

Ask where payroll data is hosted and who in the partner chain can see it.

Incorporation here is quick and needs only 1,000 EUR of share capital for a private limited company (UAB), but the running cost is the point: a registered address, accounting, annual financial statements, audit thresholds and payroll software set an annual floor.

Permanent establishment risk is about what people do, not where payroll sits. Revenue-generating activity can create exposure regardless of the employment route.