Payroll & Workforce Management in Lithuania

What running payroll in Lithuania costs and requires

Lithuania's standard corporate income tax rate rose from 16% to 17% from 1 January 2026, with the reduced rate for qualifying small companies (fewer than 10 employees, revenue under €300,000) increasing from 6% to 7%. The 0% rate for newly registered small companies was extended from one to two years in the same reform, and the employee-count condition for this startup rate was removed, broadening eligibility. The UAB, Lithuania's standard private limited company, requires €2,500 in minimum share capital with at least 25% paid up before registration.

Operating in Lithuania combines a 2026 corporate tax increase with structurally low employer-side social contributions, and offers one of the EU's most generous R&D deduction regimes for technology and product-development companies specifically.

What sits on top of gross salary

~1.77% of gross salary (Sodra) — employee side ~19.5%, a markedly asymmetric split — this is a direct cost the employer budgets on top of gross pay for every hire, not a deduction from it.

• 2026 corporate tax increase — — standard rate to 17% (from 16%), small-company rate to 7% (from 6%), effective 1 January 2026
• Extended 0% startup rate — — new small companies now qualify for two tax periods at 0%, up from one, with the employee-count eligibility condition removed
• Progressive personal income tax transition — — moving to a three-tier 20%/25%/32% system on total income including employment, self-employment, rental and capital gains
• Asymmetric Sodra contribution split — — employer pays only ~1.77%, employee pays ~19.5%, requiring clear gross salary communication to candidates unfamiliar with the structure

The statutory floor for Lithuania

€1,153/month gross (2026). Underpaying the statutory floor exposes the employer to fines and back-pay claims, and should be checked against any role before an offer is made — thresholds are typically revised annually.

Standard cycle and documentation

Payroll in Lithuania runs on a monthly cycle, in arrears. Payslips must itemize gross pay, statutory deductions, and net pay — incomplete or incorrect payslips are exactly what a labour or social security audit checks first, so the format is a compliance requirement, not a formality.

Employer obligations and deadlines

Annual accounts filed with the Register of Legal Entities within 30 days of approval, no later than 4 months after year-end for most entities.

Employer registration runs through the Register of Legal Entities, via the notary-assisted or online registration route, typically taking As little as 1–3 business days for a standard UAB.

Frequently asked questions