In Lithuania, a comprehensive social security system is mandated by law, providing a variety of benefits to employees. Employers are required to contribute to these programs and ensure employees receive the associated benefits.

Social Security Contributions

The country operates a three-tiered social security system funded through mandatory contributions from both employers and employees. These contributions cover a range of benefits, including:

• State Pension: Contributions ensure employees qualify for a state pension upon retirement.
• Sickness and Unemployment Benefits: These benefits provide financial support during periods of illness or unemployment.

The specific contribution rates and benefit details are subject to change, so it's advisable to consult official sources for the latest information.

Paid Time Off

Employees in Lithuania are entitled to various forms of paid leave, including:

• Annual Leave: All employees receive a minimum of 20 working days of paid annual leave, with additional days accruing based on years of service. Single parents with children under 14 are entitled to 35 days.
• National Holidays: Lithuania observes 13 national holidays, which are also paid days off for employees.
• Sick Leave: Employers are responsible for paying for the first two days of sick leave at a rate of 62.06% to 100% of the employee's salary. From the third day onwards, employees are reimbursed at a rate of 62.06% of their salary.

Maternity and Parental Leave

Lithuania offers generous parental leave policies, including:

• Maternity Leave: Female employees are entitled to 70 days of maternity leave before childbirth and 56 days after.
• Parental Leave: Both parents can share an additional 180 days of parental leave, with either parent taking the leave or splitting it.

These benefits are intended to support new parents during a critical time.

In Lithuania, employers often provide additional perks to attract and retain talent, supplementing the robust mandatory benefits system. Here's a look at some commonly offered optional employee benefits:

Health and Wellness

• Private Health Insurance: Many companies offer private health insurance for additional coverage, including dental and vision care. This can provide faster access to specialists and a wider range of treatments.

• Life Insurance: Accident and life insurance are popular benefits, offering financial security to employees and their families in case of illness, disability, or death. The benefit amount often equals a multiple of the employee's annual salary.

Financial Security

• Private Pension Plans: Some companies contribute to private pension plans for their employees, providing a supplement to the state pension upon retirement.

• Flexible Benefits: This approach allows employees to choose benefits that best suit their needs, potentially including additional health insurance, childcare vouchers, or gym memberships.

Work-Life Balance & Well-being

• Flexible Working Hours: Many companies offer flexible working arrangements, allowing employees to choose their work schedules or work remotely. This can significantly improve work-life balance and employee satisfaction.

• Training and Development: Companies often invest in employee development by covering training costs or offering internal training programs. This upskills employees and demonstrates a commitment to their professional growth.

• Perks and Amenities: Free meals, gym memberships, or recreational facilities are less common but can still be found in some workplaces, particularly in the tech sector.

The availability and extent of these optional benefits vary depending on the company size, industry, and overall compensation package.

In Lithuania, health insurance operates on a dual system: mandatory public health insurance and voluntary private health insurance. It's important to understand the requirements for employees in this context.

Mandatory Public Health Insurance

Mandatory public health insurance covers all permanent residents of Lithuania, including legally employed foreigners. Employers are required to register their employees with the State Social Insurance Fund (SODRA) and deduct the employee's contribution (6.98%) from their salary for public health insurance. The employer also contributes a portion (8.24%). Public health insurance grants access to a wide range of medical services, including hospitalization, doctor visits, prescriptions, and some specialist care.

However, it's important to note that while public health insurance covers a substantial amount of medical expenses, some services may require co-payments or have limitations. Additionally, wait times for specialist care can be longer in the public system.

Voluntary Private Health Insurance

Anyone with Lithuanian public health insurance can choose to purchase voluntary private health insurance for additional coverage. Private health insurance can offer benefits not covered by public insurance, such as shorter wait times for specialist care, coverage for dental and vision care, private hospital rooms, and a wider range of treatment options.

Employers are not required to provide private health insurance, but many do so as part of a comprehensive benefits package to attract and retain talent. Some employers contribute financially towards employee private health insurance premiums, increasing the attractiveness of the benefit.

In Lithuania, a three-pillar pension system is in place to secure income after retirement. This system provides a mix of mandatory and voluntary contributions, and understanding each pillar can help individuals make informed decisions about their retirement savings.

Pillar 1: State Social Security Pension

The first pillar forms the foundation of Lithuanian retirement income. Both employers and employees contribute a portion of the employee's gross salary to the State Social Security Fund, ensuring a basic pension upon reaching retirement age.

Pillar 2: Funded Pension Scheme

The second pillar allows individuals to accumulate additional retirement savings in private pension funds. Participation is voluntary and offers the potential for a higher retirement income. The contributions are as follows:

• Employee Contribution: 3% of gross salary.
• State Contribution: 1.5% of the national average wage.

Individuals have the freedom to choose a pension fund manager and investment strategy based on their risk tolerance and retirement goals.

Pillar 3: Corporate Pension Plans

The third pillar allows employers to offer voluntary pension plans. Employers can contribute an additional 3% to 8% of the employee's salary to their chosen pension fund. These contributions can be tax-deductible for the company, making it an attractive benefit for employees seeking to maximize their retirement savings.