Payroll in Lithuania is an important service that can be handled by specialists in the field, such as our accountants. With the help of special procedures and platforms, our payroll experts in Lithuania can calculate and distribute salaries to employees of a firm. We invite you to read this article and get in touch with our team for extra details about payroll in Lithuania.
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Payroll procedures in Lithuania
Starting a business in Lithuania involves registering employees with the State Social Insurance Fund Board and the State Tax Inspectorate. In this case, the firm will obtain a payroll tax ID. Employees of a company in Lithuania receive salaries once or twice a month, depending on the rules and policies of the firm in question. Here is what payroll in Lithuania involves:
- the payroll process begins with the calculation of taxes imposed on salaries. Both the employing company and the employees pay a share of these taxes;
- calculation of taxes and deductions related to employee salaries is done with the help of dedicated platforms used by our payroll specialists in Lithuania;
- information about gross salary, working hours, taxes, and net salary can be found on the document called payslip;
- the company’s finance department and management sign payslips after they are issued by our payroll specialists in Lithuania;
- the next step after signing the documents is the delivery of salaries to employees’ accounts on the date established according to company policy.
Payroll services in Lithuania are important for any company. When opening a firm here, you can opt for the legal services offered by our lawyers in Lithuania because they can also put you in touch with a team of payroll specialists.
Social contributions in Lithuania
Both employees and employers pay social contributions in Lithuania. Here’s what it’s all about:
- from 1.61% and up to 2.49% represent the social contributions that cover healthcare, unemployment, and pension, on behalf of employers in Lithuania.
- around 19.5% is the social security contribution paid by employees, if income exceeds the amount of EUR 126,532 per year. A lower rate of around 6.98% is paid for amounts that exceed the above-mentioned threshold.
- employees can opt for a 3% contribution to the second pension pillar, of which 1.5% goes to the state.
Tax contributions of employees in Lithuania
As mentioned above, around 19.5% represents employee payroll contributions, which can be detailed as follows:
- 8.72% is the contribution to the pension scheme in Lithuania.
- 1.81% of gross salary goes to the maternity fund.
- 1.99% is the contribution to the sickness insurance fund in Lithuania.
- 6.98% represents the contribution to the health insurance fund.
As for individual income tax contributions, this varies between 20% and 32% depending on the salary. For example, income tax of 32% is paid by those with salaries of at least EUR 81,162 per year. Our attorneys in Lithuania with experience in tax-related matters can tell you more about the social contributions.
What other tasks does a payroll specialist in Lithuania have?
A payroll specialist in Lithuania, as you can find at our local firm, is required to submit payroll data and returns in an electronic format to the relevant authorities. This is the State Social Insurance Fund Board and the State Tax Inspectorate, with which our payroll specialists collaborate on dedicated platforms and use at their disposal.
Our payroll specialists in Lithuania can offer you complete services from the start of your business in this country. In addition, our immigration lawyers in Lithuania can guide you in company and/or family relocation, offering complete legal services. We invite you to discover more by contacting our law firm in Lithuania.