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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.

These details are subject to change by the respective government and regulatory authorities in each country.

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