Lithuanian Payroll Services

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Lithuanian Payroll

Compliance with the local payroll laws and regulations are vital to a business’ smooth and hassle-free transition, which is where we come in. We offer dedicated Lithuania Payroll solutions that can be personalized to your requirements.

We aim to make business expansion easy. We navigate the administration of the Lithuanian payroll system for you – and as part of our service, we make the returns and associated payments for income tax and social security contributions directly from our payroll system to the local tax authorities. We do the work, so you do not have to.

What Lithuanian Payroll Options are available for Companies?

Businesses in Lithuania have access to a variety of payroll options, depending on your business’ needs:

  • Payroll Option Information : Remote payroll This option allows businesses to operate under a single payroll system for all employees, by adding your employees in Lithuania to your parent company’s payroll. However, these employees must operate under different regulations, which can cause some confusion.
  • Internal payroll : You may operate payroll out of your subsidiary, especially if you are committed to growing your company’s presence in Lithuania. However, this does require hiring a dedicated HR staff that understands the local employment and compliance laws.

Lithuanian Payroll Services

Payroll regulations in Lithuania change frequently, and businesses risk sanctions and financial penalties if they fail to comply with these changes. Our payroll service requires staying up to date with these shifting demands – which includes administering returns and associated payments for wage tax and social security contributions directly from our payroll system to the tax authority. Our role consists of:

  • Registering with the State Tax Inspectorate for a Lithuanian Tax Identification Number (VMI)
  • Registering with the State Social Insurance Fund Board (SODRA)
  • Registering with the State Labor Inspectorate (VDI)
  • Registering employees with the Lithuanian Employment Service
  • Creating employment contracts for your new employees, in Lithuanian and English
  • Register with the Compulsory Health Insurance Fund (CHIF)
  • Applying for employees’ special expatriation status (if applicable)
  • Calculating employees’ monthly salary and sending them their pay slips
  • Researching for any available tax incentives
  • Submitting employees’ or employer’s wage tax returns and national insurance forms
  • Corresponding with the applicable national authorities regarding payroll changes and payments
  • Creating and submitting your company’s annual accounts, administration, and year-end statements
  • Creating payment schedules for wage tax, national insurances, and net wages
  • Ensuring proficient personal income tax returns for you and your employees

What is required to set up Lithuanian Payroll?

The requirements for setting up Lithuania payroll will depend on how you establish your presence in the country. If you would like to set up as a subsidiary, you will need to have your subsidiary established first – but this can take some time, depending on where you incorporate as well as the entity type you choose.

To start processing payroll in Lithuania, you will need:

  • A tax identification number (known as a VMI) 
  • A social insurance registration (SODRA) 
  • A local bank account 

It should also be noted that it is not necessary to be licensed before making any tax or social security fillings on behalf of a client.

Registering with the tax and social contributions authorities will take approximately 5 working days. To pay employees and local authorities from an in-country bank account, it only takes one day to set up – however, this is not mandatory for payroll. If you would like to make the appropriate payments online, however, a bank account is required.