Your Guide to Hiring Employees and Contractors in Latvia
Ease of doing business
20.77% to 23.59%
In Latvia, the payroll frequency is generally monthly. Unless the employee and employer have agreed on payment once a month, the employer must make payment no less than twice a month.
Minimum Wage Requirements
The minimum wage is EUR 500 per month.
Individual Income Tax
The individual income tax ranges from 20% to 31.4% and is calculated according to progressive rates.
Up to EUR 20,004
Tax rate: 20%
Between EUR 20,004 – 62,800
Tax rate: 23%
Above EUR 62,800
Tax rate: 31.4%
The employer cost is generally estimated at 24% of the employee salary.
- Employer Social Security Contribution: 23.5%
- Business risk fee per employee: €0.36
Monday to Friday.
Overtime Pay & Maximum Hours
Overtime payment is mandatory. Hours outside of standard work hours are considered overtime. Employees can work a maximum of 8 hours of overtime per week.
Overtime cannot exceed 48 hours per month and 200 hours per year. For additional hours, employees are paid a minimum supplement of 100% of the hourly or daily wage rate.
Terminations in Latvia can be complex. There is no at-will termination in Latvia for employers outside the probation period and termination must be done for just cause.
Compliant terminations include:
Voluntarily by the employee
By mutual agreement
Unilaterally by the employer (causes established by Labor Law on section 101)
The minimum notice period is one month and can be shortened if agreed upon in the employment contract.
The maximum length of a probationary period is three months.