Employer of Record in Lithuania: what one employee really costs

Questions people ask before booking a demo

How much does an employer of record cost in Lithuania?

The statutory employer charge is 1.77% of gross pay for an open-ended contract: unemployment insurance 1.31%, accident insurance 0.14% at the group I rate, the Guarantee Fund 0.16% and the Long-Term Employment Benefits Fund 0.16%. On a US$40,000 salary that is about US$59 a month on top of pay. Published EOR fees then run from about $199 to $699 per employee per month, so the fee is several times the tax and the all-in cost lands near $3,590 to $4,090 a month.

Why is the Lithuanian employer cost only 1.77%?

Because in 2019 Lithuania moved almost the whole social insurance burden onto the employee and raised gross salaries to compensate. Sodra's 2026 table shows the split that resulted: the employer pays 1.77%, the employee pays 19.5% - pension 8.72%, sickness 1.99%, maternity 1.81%, health 6.98% - plus 3% more if they are in supplementary pension saving. Charges that appear as employer lines in Germany or Latvia are on the Lithuanian employee's side of the payslip.

Does a low employer rate make a Lithuanian hire cheap?

Not by as much as 1.77% suggests, and this is the number most comparisons get wrong. When the contributions moved in 2019 the law required gross salaries to be re-indexed by 1.289. The State Data Agency records it plainly - 'Nuo 2019 m. sausio 1 d. pakeisti darbdavio ir darbuotojo mokamu valstybinio socialinio draudimo imoku tarifai. Bruto darbo uzmokestis indeksuotas 1,289 karto' - and its own series show the effect: average gross pay jumped from EUR 924 in 2018 to EUR 1,296 in 2019 while average net pay rose only from EUR 735 to EUR 864. A Lithuanian gross figure is built on a larger base than the same job's gross in a country that never made the transfer, so compare total cost of employment, not headline rates.

Why do provider pages quote 2.37% for Lithuania rather than 1.77%?

Because the extra 0.6 of a point is the provider's own charge, not Lithuanian law. Deel's Lithuania page lists exactly the four statutory lines this page prices - 1.31, 0.16, 0.16 and 0.14 - and then adds an 'Employer Liability Cost' described as an administrative fee of 0.60% for worker compensation and liability coverage, reaching 2.37%. Treat that 0.6 as a fee to negotiate alongside the monthly price, and ask each provider whether the same markup sits inside its quote under a different name.

What leave, probation and notice apply in Lithuania?

Twenty working days of annual leave on a five-day week under article 126(2) of the Labour Code, with public holidays excluded from the count under article 126(4), and twenty-five days for employees under eighteen, single parents of a child under fourteen and employees with a disability. Article 123 names sixteen public holiday days, three of which - Easter Sunday, Mother's Day and Father's Day - always fall on a Sunday. Probation runs to at most three months under article 36(2) and cannot be extended by agreement. Notice on the employer's initiative is one month, or two weeks below a year of service.