Lithuania HR and payroll glossary

GPM Personal income tax

gyventojų pajamų mokestis

Since 2026 there are three rates on employment income: 20% up to 36 average wages (€83,237.40 a year), 25% up to 60 average wages (€138,729) and 32% above. Payroll withholds 20% monthly; the higher rates are settled in the annual return. Employee social insurance is not deductible. Source

NPD Non-taxable income amount

neapmokestinamųjų pajamų dydis

The tax-free amount deducted from gross pay: €747 a month where pay does not exceed the minimum wage, reduced by 49% of pay above €1,153 a month, so it reaches zero at about €2,677 a month (€32,129.88 a year) in 2026. Professional hires usually get none. Source

Garantinis fondas Guarantee Fund

An employer contribution of 0.16% of pay that funds payment of outstanding wages to employees if their employer becomes insolvent. Budgetary institutions and some non-profit bodies do not pay it. Source

Ilgalaikio darbo išmokų fondas Long-term Employment Benefit Fund

An employer contribution of 0.16% of pay (on at least the minimum wage). The fund, administered by Sodra, pays a long-term employment benefit to employees made redundant after several years with the same employer, on top of the employer's own severance. Source

Nedarbo socialinis draudimas Unemployment social insurance (employer)

nedarbo socialinio draudimo įmokos

Paid by the employer only: 1.31% of gross pay for an open-ended contract and 2.03% for a fixed-term contract, uncapped. Since employee contributions carry most of the cost, Lithuanian employer on-costs are unusually low. Source

Nelaimingų atsitikimų darbe draudimas Accidents at work and occupational diseases insurance

nelaimingų atsitikimų darbe ir profesinių ligų socialinis draudimas

Employer-only insurance whose rate depends on the employer's risk group: 0.14% for group I, the usual case for offices, and 0.49%, 0.7% or 1.4% for groups II–IV. Source

PSD Compulsory health insurance contribution

privalomojo sveikatos draudimo įmokos

6.98% of gross pay withheld from the employee, with no ceiling (the VSD ceiling does not apply to PSD). Source

VSD State social insurance contributions

valstybinio socialinio draudimo įmokos

The employee's social insurance: pension 8.72%, sickness 1.99% and maternity 1.81% of gross pay (12.52% in total) in 2026. These stop above the annual ceiling of 60 average wages, €138,729 in 2026. They are not deductible for income tax. Source

Kasmetinės atostogos Annual leave

kasmetinės atostogos

At least 20 working days a year on a five-day week (24 on a six-day week), longer for minors, single parents of young children, disabled employees and certain jobs. Source

MMA Minimum monthly wage

minimali mėnesinė alga

The statutory minimum monthly wage: €1,153 in 2026. Besides setting the pay floor, it is the reference point for the NPD taper. Source

VDU Average wage (national)

vidutinis darbo užmokestis

The national average wage used as the yardstick for tax bands and the social insurance ceiling: €2,312.15 a month for 2026. The same abbreviation also means an individual employee's average pay, which is the basis for notice pay, severance and holiday pay. Source

Išbandymo laikotarpis Probationary period

išbandymo laikotarpis

Up to 3 months, or up to 6 months for employees whose contractual monthly pay is at least twice the national average wage. Sickness and leave are excluded and probation cannot be extended by agreement. Source

Išeitinė išmoka Severance pay

išeitinė išmoka

On termination without the employee's fault, the employer pays two months' average pay, or half a month's if employment lasted under one year. A private employer ending a contract 'at the employer's will' must pay at least six months' average pay. Source

Įspėjimo terminas Notice period

įspėjimo terminas

Employer notice for termination without the employee's fault is one month, or two weeks with under a year's service; it is doubled within five years of pensionable age and tripled for parents of children under 14, pregnant or disabled employees, or within two years of pensionable age. An employee may resign on 20 calendar days' notice. Source

Sodra State Social Insurance Fund Board

Valstybinio socialinio draudimo fondo valdyba (Sodra)

Lithuania's social insurance agency. Employers register each employee with Sodra before work starts, file monthly reports and pay both the employee's social and health insurance and the employer's contributions to it. Source

VDI / DGK State Labour Inspectorate / Labour Disputes Commission

Valstybinė darbo inspekcija / darbo ginčų komisija

The State Labour Inspectorate supervises labour law and safety. Its labour disputes commissions are the mandatory first step for most employment claims, including challenges to dismissal, before a case can go to court. Source

VMI State Tax Inspectorate

Valstybinė mokesčių inspekcija

Lithuania's tax authority. Employers pay withheld income tax to VMI and file monthly and annual withholding returns; employees settle any higher-rate tax in their annual return. Source