Economic Overview, European FinTech Capital & Unicorn Tech Hub
Lithuania is the #1 licensed FinTech and Electronic Money hub in the European Union, hosting unicorns like Vinted and Nord Security in Vilnius.
Key Economic Sectors
- FinTech, EMI & Digital Banking: Over 250 licensed fintechs, European banking hubs (Revolut), and blockchain compliance.
- Cyber Security & Software: Nord Security, custom enterprise software, and cloud infrastructure engineering.
- Life Sciences & Laser Physics: World-leading scientific picosecond lasers and global biopharma manufacturing (Thermo Fisher).
Employment Contracts, Labour Code & Sodra Pre-Registration
Regulated by the Labour Code of the Republic of Lithuania (Darbo kodeksas).
- Mandatory Sodra 1-SD Notification: Employers must electronically register new employees with Sodra at least **1 hour before they start work**.
- Probation Period: Maximum statutory probation is 3 months.
Working Hours, Overtime & Rest Periods
- Standard Hours: 40 hours per week (8 hours/day over 5 days). Maximum weekly limit with overtime is 48 hours.
- Overtime Surcharges: Minimum 150% (1.5× hourly wage) for daytime overtime; 200% (double time) for night overtime or work on rest days; 250% (2.5× hourly wage) for work on public holidays.
Annual Leave (20 Working Days), Holidays & Parental Benefits
- Annual Paid Vacation: Minimum 20 working days (for 5-day week) or 24 working days (for 6-day week) per year.
- Public Holidays: 14 official national public holidays.
- Maternity Leave: 126 calendar days (70 prenatal + 56 postnatal) paid at 77.58% via Sodra. Followed by flexible paid parental leave up to age 2 or 3.
- Paternity Leave: 30 consecutive calendar days paid via Sodra.
State Social Insurance (Sodra), PSD Health & 20% GPM Tax
| Statutory Scheme | Employer Share | Employee Share | Description |
|---|---|---|---|
| Employer Sodra Social Insurance | 1.77% | 0.00% | Unemployment (1.31%), Guarantee Fund (0.16%), Long-term benefit (0.16%) |
| Employee Sodra (Pension & Health PSD) | 0.00% | 19.50% | Pensions (8.72%), PSD Health (6.98%), Sickness/Maternity (2.09%) + Tier II (+3%) |
| Total Statutory Contributions | 1.77% | 19.50% | Consolidated gross wage system |
Personal Income Tax (GPM): 20.0% standard rate on earnings up to 60 average monthly salaries (VDU); 32.0% on excess, administered by VMI.
Termination, Notice Periods & Long-Term Service Benefit
- Notice Periods: 1 month standard (or 2 weeks for tenure < 1 year; doubled for employees caring for children under 14).
- Severance Pay: 2 months' average salary (tenure >= 1 year) or 0.5 months (tenure < 1 year), plus supplementary long-term benefit from the Long-Term Employment Fund.
Why Use an Employer of Record (EOR) in Lithuania
- Rapid FinTech & Tech Deployment: Onboard software engineers and compliance specialists in Vilnius in days.
- Sodra & VMI Automated Compliance: Seamless electronic registration of contracts, Sodra reporting, and monthly GPM tax filings.
- EU Blue Card & Startup Visa Sponsorship: EOR manages Migration Department work permits for foreign specialists.
