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Lithuania has ~23% total employer social contributions (mostly employee-borne Sodra), a two-rate GPM income tax (20%/32%), EUR 924/month minimum wage, and a thriving Vilnius fintech ecosystem. Rippling handles Sodra, VMI, and Lithuanian Labour Code compliance.
Lithuania is a Baltic EU member state with a rapidly growing technology and fintech sector centered in Vilnius. Lithuania has the highest share of fintech companies per capita in the EU. The country has strong IT education, a growing startup ecosystem, and salaries significantly below Western European levels while offering EU regulatory access. Lithuania uses the Euro (EUR) and joined the Eurozone in 2015.
| Contribution | Rate | Notes |
|---|---|---|
| Sodra (employer) | ~1.77–2.49% | Work accident insurance (1.77%) and health insurance supplement; total employer Sodra approximately 2.49–4% |
| Guarantee Fund | 0.16% | Employee protection fund |
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| Contribution | Rate | Notes |
|---|---|---|
| Sodra (employee) | 19.5% | Pension 8.72%, health 6.98%, unemployment 1.31%, sickness 2.09%, maternity 0.4% |
| Income tax (GPM) | 20% / 32% | 20% on income up to 60 AWW (average wage); 32% above |
| Annual Income | Rate |
|---|---|
| Up to ~EUR 101,094 (60 AWW) | 20% |
| Above EUR 101,094 | 32% |
Non-taxable amount (NMA) applies for lower earners. Monthly GPM withholding by employer; remitted to VMI.
Notice: 2 weeks (probation); up to 3 months (general). Severance: 1 month (1–3 years); 2 months (3–10 years); 3 months (10+ years). Labour Exchange notification for collective redundancies (10+ employees over 30 days).
Lithuania has a two-rate personal income tax (GPM): 20% on income up to 60 times the average monthly wage (AWW) per year (approximately EUR 101,094 in 2024); 32% on income above that threshold. Most employees are taxed at 20%. Employer withholds GPM monthly and remits to VMI. Lithuania also has a non-taxable income amount (NMA) that reduces the taxable base for lower earners.
Lithuania's minimum wage is EUR 924/month (2024), one of the highest minimum wages in the Baltic states as a share of average wages. Lithuania has been increasing its minimum wage rapidly as part of EU convergence. The minimum wage is reviewed annually.
Lithuania has emerged as one of the leading fintech hubs in the EU, hosting over 200 licensed fintech companies in Vilnius. The Bank of Lithuania operates a fast-track regulatory licensing process (CENTROlink). Lithuania is also a growing hub for technology outsourcing, shared services, and business process operations. Major employers include Nasdaq, Thermo Fisher, Western Union, and a large network of fintech startups.
Lithuania requires employers to pay severance on notice-period termination: 1 month's average wages (1–3 years' service); 2 months (3– years); 3 months (10+ years). Additional severance from the Guarantee Fund is available for long-service employees. Notice periods: 2 weeks (probation); up to 3 months (general). Redundancy notification to the Labour Exchange required for collective dismissals.
