Cost of an employee in Lithuania (2026)
What an employee really costs an employer in Lithuania: gross salary plus mandatory employer social contributions.
On a gross salary of €2,427 per month in Lithuania, an employer pays about €2,470 in total once mandatory employer social contributions of 1.8% on top of the gross are included.
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How salary is taxed in Lithuania
Income tax in Lithuania is progressive: marginal rates rise from 20% to 32% as income grows.
Employees also pay social contributions of around 19.5% of gross salary.
A tax-free allowance of about €4,000 per year is deducted before income tax.
The standard VAT rate is 21%.
| Annual taxable income | Tax rate |
|---|---|
| Up to €82,962 | 20% |
| Up to €138,270 | 25% |
| €138,270 and above | 32% |
Frequently asked questions
What does it cost to employ someone in Lithuania?
On top of the gross salary, an employer in Lithuania pays mandatory social contributions. The total cost of employment is the gross salary plus those employer contributions.
Are employer contributions the same as salary deductions?
No. Employer contributions are paid by the company in addition to the gross salary, while employee deductions (income tax and social contributions) are taken out of the gross to leave the net take-home pay.
Employer-contribution rates are approximate and may be capped or vary by region and sector.
Approximate 2026 estimate. Simplified model, verify before relying on it. Not tax advice.
Rates updated June 2026