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Income Tax in Lithuania

Income Tax in Lithuania is progressive and ranges from 20% to 32%.

Social Security in Lithuania

In Lithuania, both employers and employees contribute to social security. The contributions are as follows:

Employer Contributions

• Employers contribute 1.77% of a permanent employee's gross salary into the social security fund.
• For fixed-term employees, the employer contribution rate is higher at 2.49%.
• These contributions cover retirement, unemployment, sickness, and maternity leave benefits.
• Employers must also contribute 0.16% of the employee's gross salary into the guarantee fund, which provides support if the employer goes bankrupt.
• An additional 0.16% contribution goes to the long-term employment fund, which provides payments to employees if the employer terminates the agreement without cause.
• The social insurance contribution rate for accidents at work and occupational diseases varies based on the company's risk profile, ranging from 0.18% to 1.8%.

Employee Contributions

• Employees contribute 19.5% of their gross salary towards social security.
• This employee contribution is withheld by the employer during payroll.
• The 19.5% employee contribution is divided into:
• 2.09% for illness insurance
• 1.71% for maternity insurance
• 6.98% for health insurance
• 8.72% for pension insurance (1st pillar)