In this work, we discretize contact problems on an unfitted Finite Element framework, em- ploying the method of Lagrange multipliers for enforcing the non-penetration condition on the contact interfaces. We also use the ghost penalty method to ensure the stabilization of the disproportionally cut elements. We will discuss the benefits and drawbacks of the method of Lagrange multipliers and demonstrate the optimal convergence of the discretization method for glued contact (inclusions), Signorini’s problem, and two-body contact problems. In addition, we present a tailored multigrid method for solving the algebraic problem arising from the discretization of glued contact, Singorini’s problem, and two-body contact problems in the unfitted FE framework. Our method can solve such problems by employing a tailored multilevel hierarchy of the FE spaces. Firstly, we propose pseudo-L2-projection-based transfer operators that have been specifically designed to handle the unfitted FE spaces for the multigrid method. For glued contact problems, we use a Schur complement conjugate gradient (CG) method, where the multigrid method is applied to solve the primal problem, and a preconditioned CG method with various preconditioners is used for the dual problem. For Singorini’s problem and two-body contact problems, we propose a modified projected Gauss-Seidel method as a smoother one that can enforce linear inequality constraints locally and minimize the energy function monotonically. We demonstrate the robustness and level-independence convergence property of the multigrid method for several numerical examples. Lastly, the proposed multigrid method is compared against other solution schemes for Signorini’s problem and two-body contact problems.