How do you terminate an employee in Lithuania in 2026?
Fire someone close to retirement in Lithuania and the notice you owe doubles. Fire a pregnant worker or a parent of a young child and it triples. The base is 1 month, and severance after a year of service is 2 months of average pay (Labour Code, Art. 57).
· Lithuania guide
Illustration · Vilnius, Lithuania
You need a valid reason to dismiss a Lithuanian employee. You also owe written notice. The base notice is 1 month, dropping to 2 weeks when the job has lasted under a year.
That notice doubles for staff within five years of retirement age. It triples for pregnant workers, parents of a young child, and disabled employees. The same protected groups also block dismissal without fault in many cases (Labour Code, Art. 57).
Severance after one year of service is 2 months of average pay. Under a year it is 0.5 months. Get the dismissal wrong and a court can add up to 6 months of average pay on top.
What counts as a valid reason to dismiss in Lithuania?
You cannot dismiss at will in Lithuania. The Labour Code lists the grounds you can rely on. The common one is dismissal without employee fault, which carries notice and severance.
You can also dismiss for the employee's fault, for repeated or gross breaches. Fault dismissals carry no notice and no severance. The reason must be real and documented (Labour Code, Art. 57 and Art. 58).
The Labour Code (Darbo kodeksas) separates two routes. An employer-initiated dismissal without the employee's fault uses Article 57. A dismissal for the employee's fault uses Article 58. The route you pick decides whether notice and severance are owed.
Dismissal without fault, Article 57
This covers the work no longer being needed, the employee no longer meeting the role, redundancy, and similar business grounds. It needs written notice and triggers severance. The base notice is 1 month, and 2 weeks where the job has lasted under a year.
Dismissal for fault, Article 58
This covers a serious one-off breach or a repeated breach after a prior warning within the last twelve months. A fault dismissal carries no notice period and no severance. The bar is high, and a Lithuanian court will test whether the breach was genuine and proportionate before it upholds the dismissal.
Protected workers you cannot dismiss freely
Pregnant employees, parents raising a child under three, and employee representatives have strong protection against dismissal without fault. Dismissing for pregnancy, union activity, or a complaint about rights is illegal regardless of the route. Name the real ground in writing, because the employee can challenge it in court.
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Pick the legal ground
Decide whether the dismissal is without fault under Article 57 or for fault under Article 58. The route sets whether notice and severance are owed. Write the real reason down.
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Check the protected groups
Confirm whether the employee is pregnant, raising a young child, disabled, or close to retirement. These workers carry dismissal protection and a doubled or tripled notice period.
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Serve written notice
Give the notice in writing, with the protected-group uplift applied where it bites. A fault dismissal carries no notice and no severance, so the route you chose matters here.
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Calculate severance and leave
Work out the flat severance for a no-fault dismissal and the cash value of any unused annual leave. Both are due by the final working day.
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Consult and notify for group cuts
Where the redundancy is large enough, consult the works council or union and notify the Employment Service before serving any notice. Skipping this voids the process for the group.
How much notice must you give a Lithuania employee?
The base employer notice is 1 month for a dismissal without fault. It falls to 2 weeks when the job has lasted under a year.
Then the multipliers kick in. Notice doubles for staff within five years of retirement age. It triples for pregnant workers, parents of a child under fourteen, parents of a disabled child under eighteen, and disabled employees (Labour Code, Art. 57(7)).
Notice in Lithuania is short on its face, then stretched by the protected-group multipliers. Article 57(7) of the Labour Code sets the base and the uplift in the same provision, so the two have to be read together before you serve anything.
| Situation | Employer notice |
|---|---|
| Standard, job lasted one year or more | 1 month |
| Job lasted under one year | 2 weeks |
| Within five years of retirement age | The base period, doubled |
| Pregnant, raising a child under fourteen, disabled, or listed serious illness | The base period, tripled |
| During the trial period, for poor results | 3 days |
Read the table as a floor. A worker within five years of pension age on the base 1 month gets two months. A pregnant worker on the same base gets three. Miss the uplift and the dismissal can be set aside, with back pay running until the court rules.
Paying notice out
Lithuanian employers usually require the notice to be worked. Where you agree to release the employee early, you pay the wages they would have earned across the full notice window. That payout is ordinary taxable income and runs through normal payroll deductions.
How is Lithuania severance pay calculated?
Severance on a dismissal without fault is 2 months of average monthly pay once the job has lasted a year. Under a year it is 0.5 months.
There is no scaling ladder by length of service. The same 2 months applies whether the employee has two years or twenty. Severance is due on the final working day (Labour Code, Art. 57(8)).
Article 57(8) of the Labour Code sets a flat severance, not a per-year accrual. The number turns on a single line: has the job lasted a year or not.
| Length of service at dismissal | Severance from the employer |
|---|---|
| Under one year | 0.5 months of average pay |
| One year or more | 2 months of average pay |
Because the employer figure is flat, a long-serving employee does not build a larger employer severance with each year. The extra weight for long service sits elsewhere, in a separate state benefit described below.
The long-service benefit paid by Sodra, not you
On top of employer severance, a dismissed employee can receive an additional long-service benefit tied to continuous service at the workplace. This one is paid from the state Long-term Employment Benefit Fund through Sodra, the social insurance board, not by the employer. Funding it is part of the employer contributions already running through payroll.
Final pay and accrued leave
Unused annual leave is paid out in cash on termination, whatever the reason for leaving. The statutory minimum is 20 days a year on a five-day week, so any unused balance is a real liability on the last day. Wages and the severance are settled through the normal pay cycle.
Are there extra rules for group redundancies in Lithuania?
Yes. Large-scale redundancies trigger an information and consultation duty with the works council or trade union before any notice goes out.
You must also notify the Employment Service. Skip the consultation and the dismissals can be challenged as procedurally invalid across the whole group.
An employer planning group redundancies must inform and consult the works council or trade union and notify the territorial Employment Service before serving notice. Each dismissed employee still receives the Article 57 severance: 2 months of average pay after a year of service, 0.5 months under a year.
Source: Labour Code of the Republic of Lithuania, e-seimas official text
Lithuania follows the EU collective-redundancy model. Once the number of planned dismissals over a set window crosses the legal threshold, the employer owes a consultation process aimed at reducing the number of redundancies and softening the impact. The consultation has to be genuine, not a formality after the decision is made.
What the consultation has to cover
- The reasons for the planned redundancies
- The number and categories of employees affected
- The selection criteria for who goes
- The timetable for the dismissals
- Measures to support the affected employees
The territorial Employment Service must be told in writing. Selection cannot fall on a protected worker because of pregnancy, child-rearing status, disability, or union role. Those workers keep both the dismissal protection and the doubled or tripled notice.
Can you agree a mutual exit in Lithuania?
Yes. Employer and employee can end the contract by written agreement at any time. This is the cleanest route when both sides want it.
A mutual termination agreement sets the leaving date and the payment. It can include a severance figure the parties choose, since the Article 57 minimum does not bind a genuine mutual exit.
A mutual termination agreement is recognised by the Labour Code as a standalone ground. One side proposes terms in writing, the other has a short window to respond, and the signed agreement ends the contract on the agreed date. It sidesteps the notice multipliers because there is no employer-initiated dismissal to uplift.
What a Lithuanian mutual exit usually records:
- Leaving date, fixed by agreement rather than a notice count
- Agreed exit payment, often pitched around or above the 2 months statutory severance to make the deal attractive
- Accrued annual leave, the unused balance from the 20 days yearly entitlement, paid in cash
- Confidentiality and reference wording, where both sides want them
- A waiver of further claims, so the matter is closed once signed
The employee is free to refuse and insist on the standard route, so the offer has to stand on its own merits. Final settlement runs through normal payroll, where employee social and health contributions of 19.5% and income tax are withheld in the usual way.
How Teamed runs Lithuania terminations
Teamed is your legal employer of record in Lithuania. The cost is from $599 per employee per month, with zero FX mark-up in any currency. Every Lithuanian dismissal runs through Teamed's local operations team.
We work out the right notice with the protected-group uplift applied, run the severance maths, and settle accrued leave. All of it lives on one platform. The call on who to let go, and why, stays yours.
Real HR and legal experts handle your Lithuania hires, from the first contract through every payroll run and Sodra filing. An actual person, not a chatbot or a pooled queue. There is no setup fee and no exit fee, and employer cost passes through at cost, itemised on every invoice.
The split of responsibilities under EOR for a Lithuania termination:
| What Teamed handles | What you decide |
|---|---|
| Notice from the 1 month base, doubled or tripled where a protected group applies | Whether to dismiss, the ground, and the timing |
| Article 57 versus Article 58 routing, with the written reason documented | What counts as fault or poor performance in your team |
| Severance at 2 months after a year, 0.5 months under | Whether to offer enhanced terms above the minimum |
| Works council or union consultation and the Employment Service notice for group redundancies | Communication with the wider team |
| Accrued leave payout from the 20 days entitlement | Reference wording and any confidentiality terms |
| Final payroll, with 19.5% employee contributions and income tax withheld | Commercial terms of any mutual exit |
EOR, contractors, and entity employees all live on one platform. A worker hired through Teamed's Lithuania network can graduate to your own Lithuanian entity when headcount makes that the right call, until it isn't. Run the Crossover Calculator to see when the model flips. Start from the Lithuania hiring overview.
Key sources: Labour Code of the Republic of Lithuania, Sodra social insurance rates, and the State Tax Inspectorate (VMI).
Frequently asked questions
How much notice must you give a Lithuania employee in 2026?
The base employer notice for a dismissal without fault is 1 month, dropping to 2 weeks when the job has lasted under a year. That notice doubles for employees within five years of retirement age, and triples for pregnant workers, parents of a child under fourteen, parents of a disabled child under eighteen, and disabled employees. A dismissal for the employee's fault carries no notice at all (Labour Code, Art. 57 and Art. 58).
Is severance pay mandatory in Lithuania?
Yes, for a dismissal without the employee's fault. The Labour Code sets 2 months of average monthly pay once the job has lasted a year, and 0.5 months where it has lasted under a year. The figure is flat, not a per-year accrual. A dismissal for fault under Article 58 carries no severance. Severance is due on the final working day.
Can you dismiss a pregnant employee in Lithuania?
Only in narrow cases. Pregnant employees and parents raising a child under three have strong protection against dismissal without fault. Where a dismissal is allowed, the notice triples to three times the 1 month base. Dismissing for pregnancy itself is illegal and exposes the employer to reinstatement and back pay (Labour Code, Art. 57).
What happens if a Lithuania dismissal is unlawful?
A court can order reinstatement, or where it does not reinstate, award average pay for the forced absence up to one year plus compensation of one average monthly wage for every two years of service, capped at 6 months of average pay. That sits on top of the severance already owed, so a procedural slip is expensive (Labour Code, Art. 218).
How long can a probation period last in Lithuania?
The trial period runs to a maximum of 3 months and cannot be extended by agreement. During the trial, an employer who finds the results unsatisfactory can end the contract with 3 days written notice and no severance. The same protected-group rules still apply to who can be dismissed.
The Lithuania mistake we see most is treating notice as a single number. It is not. For a pregnant worker or a parent of a young child it triples, and for someone near retirement it doubles. Serve the base period to a protected employee and the dismissal can be unwound, with back pay running the whole time.
In Lithuania the notice clock runs faster for some workers than others.
The base is 1 month. For a pregnant employee or a parent of a young child it triples. For someone near retirement it doubles.
Severance stays flat at 2 months, but a botched dismissal can add 6 months on top.
Know which clock you are on before you start.
