Your Guide to Hiring Employees and Contractors in Latvia
Capital city
Riga
Currency
Euro
Language(s)
Latvian
Ease of doing business
Very easy
Payroll frequency
Monthly
Employer taxes
20.77% to 23.59%
Payroll
Payroll Cycle
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%
Employer Cost
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
Working Hours
Work Week
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.
Employment Termination
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)
Notice period:
The minimum notice period is one month and can be shortened if agreed upon in the employment contract.
Probation periods:
The maximum length of a probationary period is three months.