Lithuania Social Contributions Guide 2026
Lithuania's social security system (Sodra) requires contributions from both employees and employers. Employees contribute 19.5% of gross salary (12.5% pension social insurance, 7% health insurance). Employers contribute 1.8% (sickness and maternity fund). Total social burden on employment is 21.3%. The system provides pensions, healthcare, sickness benefits, maternity/paternity leave, and unemployment insurance.
Overview β Sodra (State Social Insurance Fund)
The State Social Insurance Fund Board (Valstybinio socialinio draudimo fondo valdyba, Sodra) administers the Lithuanian social insurance system. All employees and self-employed individuals registered in Lithuania are required to participate. Contributions are calculated as a percentage of gross salary and are generally withheld at source by employers. The contribution ceiling is adjusted annually. The social insurance system is a pay-as-you-go (PAYG) system, where current contributions fund current benefits.
Employee Contributions β 19.5%
Employees in Lithuania contribute a total of 19.5% of their gross salary, broken down as follows:
- 12.5% β Pension social insurance (pensijΕ³ socialinis draudimas). This covers the state social insurance pension (first pillar). Part of this contribution (up to 3 percentage points) may be redirected to a private pension fund under the second pillar if the employee has opted into the funded pension system
- 7% β Health insurance (privalomasis sveikatos draudimas). This provides access to the state healthcare system
The employee contribution is deducted directly from the gross salary by the employer and remitted to Sodra along with the employer's contribution.
Employer Contributions β 1.8%
Employers in Lithuania contribute 1.8% of the employee's gross salary. This covers:
- Sickness and maternity social insurance β provides sickness benefits (including sick leave), maternity and paternity benefits, and parental leave benefits
Historically, Lithuania had higher employer contribution rates (over 30%), but recent reforms have shifted most of the burden to employees. The current 1.8% employer rate is one of the lowest in the European Union, making Lithuania highly attractive for employers hiring staff.
Self-Employed Contributions
Self-employed individuals in Lithuania are generally required to pay both the employee and employer shares of social security contributions. The total contribution rate for self-employed persons is approximately 21.3% (the combined employee 19.5% and employer 1.8%). However, self-employed individuals may have the option to pay reduced contributions in certain circumstances, subject to minimum thresholds. Self-employed persons must register with Sodra and file regular contribution reports.
Contribution Cap
Social security contributions are subject to an annual cap (maximum contribution base). For 2026, the maximum annual contribution base is approximately EUR 100,000 (adjusted annually based on the national average wage). Earnings above the cap are not subject to social contributions, though the exact cap figure is updated by the Ministry of Social Security and Labour each year.
Benefits Covered
The contributions fund the following key benefits:
- State pension β old-age, disability, and survivor's pensions from the first pillar
- Healthcare β access to the national health system (partially funded by the 7% health insurance contribution)
- Sickness benefit β paid from the second day of illness (employer pays for first 2 days)
- Maternity/paternity benefit β paid during maternity (126 days), paternity (30 days), and parental leave (up to 2 years)
- Unemployment benefit β for registered unemployed individuals who meet contribution requirements
- Occupational accident and disease benefits
FAQs
What is the total social contribution rate in Lithuania?
The total combined rate is 21.3% (19.5% employee + 1.8% employer). This is among the lowest in the EU.
Are social contributions deductible for tax purposes?
Yes, the employee's social contributions are deductible from personal income tax (IIT) as they are treated as a reduction of gross income. Employer contributions are tax-deductible as a business expense.
Can employees opt out of social insurance?
No, participation in the social insurance system is mandatory for all employed and self-employed individuals in Lithuania.
Disclaimer
This guide provides general information about Lithuanian social security contributions for the 2026 tax year. Rates and rules may change. Always consult with a qualified Lithuanian tax or social security advisor or Sodra directly for advice specific to your situation. InvestmentKit does not provide tax advice.