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Latvia is one of the most well-known talent hubs in Europe, known for its highly skilled workforce and strong digital infrastructure. With competitive labour costs compared to Western European countries and a growing focus on tech and remote-ready skills, Latvia offers attractive conditions for hiring talent and building distributed teams.
Latvia’s skilled workforce, competitive labour costs, and business-friendly environment are among the top reasons why global employers hire in the country. However, the country has its own employment laws that cover minimum wages, employment contracts, and social security contributions, which employers must understand to remain compliant.
Discover more about salaries, employment costs, and legal requirements for hiring in Latvia. Get our full hiring guide now!
Employment contracts in Latvia must be concluded in writing, with provisions regarding the key employment terms, including wages, working hours, social security contributions, probationary periods, and similar.
Notice periods: From 10 days to 1 month.
Termination of employment: Mutual agreement, employee-initiated, employer-initiated, and probationary period.
Want to get all the details of employment contracts in Latvia? Get our full template now!
Employers in Latvia must provide mandatory employment benefits in compliance with the country’s labour laws. Many of them also offer extra benefits to stay competitive in the job market. Understanding both of them is essential to attracting and retaining talent.
Want a full breakdown of all the employee benefits available in Latvia?
Latvia has a well-regulated tax system that employers must follow to stay compliant. Employers are required to withhold personal income tax and social contributions from their employees’ salaries and submit them to the authorities. Other tax obligations may include corporate income tax, VAT, royalties and dividends.
Personal income tax rate: From 25.5% to 33% (+3% for higher income).
VAT: 21%
Tax allowances: Employer gifts, childbirth allowance, funeral allowance, compensation for using a personal vehicle for work.
Additional tax reliefs: Additional allowance for politically repressed persons/ national resistance members, expenses for education and medical/dental services, and others.
Want to learn all the details about Latvia’s tax allowances and similar tax regulations?
Salaries in Latvia must be paid at least once a month and must comply with the minimum wage regulations established by the authorities. Salaries are calculated based on a 30-day month, regardless of the actual number of working days, and employees receive their salaries over a 12-month period each year.
Salary payment deadline: By the end of the month.
Taxes and contributions payment deadline: By the 23rd of the following month.
Payroll declarations deadline: By the 5th of the following month.
Payroll currency: EUR
Latvia’s employment laws are primarily governed by the Labour Law (Darba likums), which focuses on various aspects of employment. This includes key provisions regarding employment contracts, working hours, wages, benefits, and termination policies that employers must comply with.
Total employment cost:
Minimum wage: EUR 740 per month.
Probation period: Up to 3 months.
EOR services allow you to legally employ workers from Latvia without establishing legal entities there. Your EOR will take over the responsibility of the legal employer, including the handling of:
PEO services offer HR and admin support while you stay the legal employer for your team in Latvia. PEO services are ideal for employers who already have legal entities in Latvia but need help managing:
Native Teams’ payroll calculators are adjusted to 85+ countries’ local labour laws, including Latvia. With our calculator, you can easily estimate net/gross salaries, social security contributions, and other mandatory deductions in the country.
Note: The information provided above is for general guidance only and should not be considered a substitute for legal advice. We strongly recommend consulting with qualified professionals who specialise in local labour laws before making any hiring decisions. While the data was accurate at the time of writing, labour regulations are subject to change, and it is your responsibility to stay informed about the latest developments.
Last update: July 28, 2025
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When hiring freelancers or gig workers in Latvia, it’s essential to define the working relationship in the beginning. Freelancers are self-employed, and they handle taxes and social security contributions on their own. Since they’re not entitled to any employment benefits, they’re not subject to the same level of control as regular employees.
Hence, it’s important to clearly define working terms and conditions to avoid misclassification risks.
