Understanding Employment Norms in Latvia: A Comprehensive Guide
Tarmack LogoRequest a demo
HP Top Banner

Hiring Talent And Managing Payroll In Latvia?

Get Started

Hiring in Latvia Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in Latvia?

Employment Norms in Latvia

Latvia's employment norms are regulated by the Labor Law, which outlines the rights and obligations of employers and employees. The law establishes a standard workweek of 40 hours and provides for minimum wage, overtime pay, and annual leave.

General Information:

  • The currency of Latvia is Euro (EUR)
  • Riga is the capital of Latvia
  • Latvian is the official language of Latvia. Documentation is done in the Latvian language.
  • As of 2022, the GDP of Latvia was reported to be 76.68 Billion USD
Employers are required to provide a safe working environment and comply with health and safety regulations. In Latvia, both fixed-term and indefinite-term employment contracts are permitted, and termination of employment is subject to certain legal requirements.
Latvia map

Table of Contents

  • Agreements
  • Onboarding Process
  • Visa
  • Minimum Wage
  • Payroll Cycle
  • Annual Bonus
  • Health Benefits
  • Working Hours and Overtime
  • Leaves
  • Social Security
  • Taxes for Employers
  • Taxes for Employees
  • Probation
  • Termination
  • Severance Pay
  • Employees or Contractors
  • Final Words


  • There are primarily two kinds of work contracts available in Latvia:
    • Open-ended employment contracts- The most common and are used for indefinite work in Latvia.
    • Fixed-term employment contract- This sort of contract is used, among other unique situations, for seasonal work, contract-length-required tasks, filling in for an absent employee, outside-the-company informal labor, emergency work, and special industries. A fixed-term agreement is limited to five years.
  • Irrespective of the type of contract, the following clauses should be included in all employment contracts:
    • Location of employment
    • The specific line of work
    • Duties that go along with the work
    • Wage
    • Probation period
    • Mandatory notice periods
    • Working hours
    • Terms of the collective bargaining agreement or the rules governing work procedures that are relevant to the employment connection
    • Duration and the beginning date of the working relationship (for fixed-term contracts only)
Onboarding Process

Onboarding Process

The employee onboarding process typically involves the following:
  • An offer letter and employment contract
  • Verification and documentation
  • Orientation and training
  • Introduction to team and stakeholders
  • Provision of tools and resources
  • Performance management and feedback
  • Ongoing support


Kenya has 3 types of Visas:
  • Type A or Airport Transit Visa- Foreign nationals who must pass through Latvia's airport transit zone on their way to another location are granted this visa.
  • Schengen Category C- Often known as a short-term visa or unified visa. It enables a visitor from outside the Schengen Area to remain on its soil.
  • Type D or Long-Stay Visa- Foreign people who are entering Latvia and need to stay for more than 90 days within six months are given Type D or long-stay visas. Also, the holder of this visa is permitted to travel across the Schengen Area at this time.

Tarmack helps you easily hire international talent as your full time employees without opening international subsidiaries. Find out more about our Employer of Record services

Learn More
Minimum Wage

Minimum Wage

In 2023, Latvia's current minimum wage is 620 EUR per month. It came into effect on January 1st, 2023.
Payroll Cycle

Payroll Cycle

In Latvia, the standard payroll cycle is monthly, with employees typically being paid on the last business day of the month.
Annual Bonus

Annual Bonus

In Latvia, there is no legal requirement for employers to pay an annual bonus. However, many employers choose to offer bonuses as a form of incentive or recognition for employees' performance. The terms and conditions of any bonus payments should be clearly defined in the employment contract or collective agreement.
Health Benefits

Health Benefits

  • Socially insured individuals are eligible to receive sickness benefits.
  • Benefits are provided if an employee or self-employed individual misses work or is unable to complete their duties.
  • If they paid social insurance contributions for at least 3 months in the previous 6 months or at least 6 months in the previous 24 months, they are eligible for illness benefits.
Working Hours and Overtime

Working Hours and Overtime

  • Work hours:Employees work Monday to Friday for 8 hours a day and 40 hours a week.
  • Break:Everyday lunch breaks must last at least 30 minutes.
  • Overtime: Payment for overtime is mandatory. The overtime should not exceed 48 hours in a month and 200 hours a year. Employees receive 100% of their hourly wage for a rework.


Sick Leave

  • In Latvia, 52 weeks of paid sick time may be taken in a three-year span. The first day of the leave is unpaid. Depending on the length, different rates are paid by different payers for the remaining leave days:

Maternity leaves

  • Employees who are pregnant are entitled to 112 paid days off. 56 days off must be taken before the baby is delivered and 56 days after birth. The worker will get paid 80% of their typical wage. The 12-month period that ends two months before the leave is used to calculate the average wage. This compensation will be provided by the State Social Security Agency. Through parental leave, the employee may prolong their leave.

Paternity leaves

  • 10 paid paternity leave days are available to employees. The worker will get paid 80% of their average income. This compensation will be provided by the State Social Security Agency. Using parental leave, the employee may extend their leave.

Parental leaves

  • Until the child becomes eight years old, employees are entitled to 18 months of paid parental leave. Parental leave can be used all at once or in halves. Parental leave is available to either parent.

Annual leaves

  • 20 days of paid time off (PTO) are allotted to full-time and part-time workers per year. With 1.67 paid days (or 2.33 calendar days) each month, PTO accrues every month. After six months of employment, employees are entitled to yearly leave for the first year.

Public Holidays (for the Calendar year 2023)

  • New Year's Day (1st January)
  • Good Friday (7th April)
  • Easter Monday (10th April)
  • Labor Day (1st May)
  • Independence Restoration Day (4th & 5th May)
  • Midsummer's Eve (23rd June)
  • St John's Day (24th June)
  • Independence Day (18th November)
  • Christmas Eve (24th December)
  • Christmas Day (25th December)
  • 2nd Day of Christmas (26th December)
  • New Year's Eve (31st December)

If you structure your global talent acquisition strategy well, you will definitely enhance your talent quality and availability through a distributed workforce. Tarmack offers end to end recruiting services to help you achieve this.

Schedule Consultation
Social Security

Social Security

In Latvia, social security contributions are typically covered by an employee's salary (which is deducted from it and paid by the employer each month) as well as by the employer's own regular contributions. Employers are required to make payments of 23.59% of each employee's salary, while employees are required to contribute 10.5% of their monthly wages.
When working for a non-EU/EEA company and staying in Latvia for more than 183 days, foreign employees are required to pay quarterly contributions at a rate of 31.83%. (which could be paid by either the employer or the employee).
Taxes for Employers

Taxes for Employers

  • 23.59% - Employment with a company registered in Latvia/EU/EEA (split rate)
  • 20.77% - Employment with a company registered in Latvia/EU/EEA (when the employee is eligible for retirement and also split rate)
  • 25% - Solidarity Tax (It is levied when the maximum amount of income exceeds).

Did you know that as a part of the Employer of Record service, Tarmack offers global payroll across 100+ countries? Not just that, we even offer this global payroll service on a standalone basis. So if you're looking for a payroll provider for one or more countries, you're at the right place.

Learn More
Taxes for Employees

Taxes for Employees

  • 10.5% - Employment with a company registered in Latvia/EU/EEA (split rate)
  • 9.25% - Employment with a company registered in Latvia/EU/EEA (when the employee is eligible for retirement and also split rate)
  • 10.5% - Solidarity Tax (It is applicable on income that is greater than the maximum income attracting NSIC, which is set at EUR 78,100 per year)
  • Latvia's personal income tax system is progressive and based on annual income levels.
    • Income up to EUR 20,004 is taxed at a rate of 20%.
    • Income between EUR 20,004 and EUR 78,100 is taxed at a rate of 23%.
    • Income exceeding EUR 78,100 is taxed at a rate of 31%.


In Latvia, when parties enter into a fixed or indefinite employment contract, they can agree to include a probationary period. This period cannot exceed three months. If the employee continues to work after the probationary period ends, it is assumed that they have successfully passed the probationary period.

Ready to convert your contractor to a full time employee?

Every now and then, that contractor you hired does such a good job that you want to hire them as a full time employee. Convert such contractors into your full time employees by using Tarmack's Employer of Record service. Doesn't matter where the contractor is. Our service covers 150+ countries around the globe!

Talk To Us


  • In Latvia, an employment contract can be ended by either the employer or the employee.
  • The contract can also end due to the completion of a fixed-term contract, a mutual agreement between the employer and employee, or at the request of a third party.
  • Terminations in compliance include:
    • Employee's voluntary participation
    • Both parties agree
    • Employer acting unilaterally
Severance Pay

Severance Pay

  • Severance compensation is given to all employees who are terminated in Latvia for the following reasons:
    • Employees' level of occupational competence is insufficient to accomplish the work
    • Employees' health prevents them from carrying out the contracted work, and this is confirmed by a doctor's note
    • A former employee who handled the relevant tasks has been given a job
    • The number of staff is decreasing
    • The employer is going out of business
    • The employee is temporarily unable to complete their job duties
  • The length of employment will affect the amount of severance pay:
    • Less than 5 years of employment- One month's worth of average salary
    • 5-7 years of employment - Two months' worth of average salary
    • 10 to 20 years of employment - Three months' worth of average salary
    • More than 20 years of employment- Four months of average salary
Employees or Contractors

Employees or Contractors

In Latvia, there is a legal distinction between an employee and a contractor:
  • An employee is someone who works under an employment contract and is subject to the employer's control and direction. They are entitled to benefits such as paid leave, social security, and other protections.
  • A contractor, on the other hand, is self-employed and operates under a service contract, and has more control over their work. They are not entitled to the same benefits as an employee and are responsible for their taxes and social security contributions.
  • Misclassifying contractors and employees can lead to fines and penalties.
Final Words

Final Words

Overall, Latvia has a well-defined legal framework for employment, offering both fixed and indefinite-term contracts with clear termination rules. The country's progressive personal income tax system and monthly payroll cycle offer predictable financial management. For companies looking to expand in Latvia, using an EOR service can help streamline the hiring process and provide access to a wider pool of talent while minimizing legal and regulatory risks.

A truly global HR platform with everything you need to build, grow & manage a global team.

  • bestTalentIdentifying & recruiting the best talent
  • payrollPayroll with full compliance across 100+ countries
  • agreementsEmployment agreements as per local laws
  • contractorContractor invoices & time management
  • onboardingSmooth remote onboarding of employees
  • immigrationImmigration & mobility services around the world
Find Out More