What Should I Know About Hiring in Latvia?
If you’re considering hiring in Latvia, you should know a few things. It’s vital first to know your audience and the Latvian market well. The second step is to incorporate a company in Latvia or work with an employer of record (EOR).
Thirdly, you’ll need to secure all obligatory licenses and permits to run your enterprise legally. All employees in Latvia are guaranteed by law to receive a minimum wage, to work in a safe environment, and to be free from discrimination.
Latvia is a European Union member, which has implications for businesses looking to hire in the country. Several rules and regulations need to be followed when it comes to hiring EU citizens.
Why Is Latvia a Good Choice for Finding Remote Employees?
There are several reasons Latvia is a great place to look for remote workers. Firstly, a highly educated labor force is one advantage the country possesses. In fact, more than half of the people in the country have some level of higher education.
That’s great news for businesses looking for remote workers, as it means they have their pick of many competent individuals. Latvia’s infrastructure is another positive factor in the country’s favor as a remote worker destination.
The infrastructure in Latvia is relatively advanced and includes advanced methods of communication and access to fast and reliable online data. Finally, Latvia’s convenient location makes it a top destination for employers seeking remote workers.
How Can Native Teams Help You Hire in Latvia
As your business grows, you may need additional staff to keep up with demand. But it can be challenging to know where to start if you’re unfamiliar with the Latvian job market. When it comes to hiring in Latvia, Native Teams can be a great asset. We know the local market and can help you identify suitable candidates for your open positions. In addition, when hiring employees in Latvia, it can be helpful to have Native Team on your side to ensure that your company complies with all relevant regulations.
Hire your first Latvian employee with Native Teams.
Legal Requirements for Hiring in Latvia
To calculate the salary and taxes in Latvia please click here.
In Latvia, the minimum monthly wage is EUR 620.
Contributions & Taxes
How much are the contributions & taxes?
The average calculation of the employer’s salary share is 24%.
- Contribution to Social Security from Employers – 23.5%
- €0.36 per worker is charged to cover the business’s risk.
The tax rate for corporations in Latvia is 15%. The same 15% corporate tax rate that applies to domestic Latvian businesses also applies to foreign companies with branches operating in the country.
Employees in Latvia pay a flat income tax of 23%. Employees pay a social security tax of about 11%.
Residents of Latvia are subject to personal income tax at a flat rate of 26% of their worldwide income.
What is the payroll cycle?
Monthly pay periods are the norm in Latvia. Employers are required to pay at least twice per month unless they have mutually decided to pay only once per month.
Is there a 13th salary in Latvia?
The payment of a 13th salary is not mandated by law.
The parties to a collective agreement will now be able to decide on a probationary period that lasts more than three (three) months but no longer than six (six) months without lowering the degree of protection employees generally receive.
A probationary period can currently be stipulated in an employment contract as follows:
- 1 month for contracts lasting up to 6 months;
- Up to 2 months for employment agreements of up to 1 year.
The minimum required notice period under the law is one month.
The length of time an employee has worked for an employer in Latvia determines the amount of statutory severance pay they are entitled to receive.
- All employees with less than 5 years of service will receive one month’s pay;
- Employees with 5-10 years on the job will receive two months’ pay;
- Employees with 10–20 years of service receive three months’ salary;
- Employees with over 20 years of service receive four months’ pay.
In Latvia, an average work week consists of 40 hours, spread out over five days (or eight-hour workdays). Typical business hours are from 8:30 am to 5 pm. There is a cap on overtime of 48 hours each month and 200 hours annually.
Leave and Benefits
Leave and Benefits rules
There are 12 official holidays in Latvia:
- New Year’s Day
- Good Friday
- Easter Sunday
- Easter Monday
- Labor Day
- Restoration of Independence
- Proclamation Day of the Republic of Latvia
- Christmas Eve
- Christmas Day
- Boxing Day
- New Year’s Eve
If you’ve worked for the company for at least a month, you’re eligible for sick pay for the first ten days of your leave. Your employer pays this sick pay at a rate of 75.00% of your regular pay rate for the first three days and 80.00% for the fourth to the tenth day. The government will continue to pay the employee’s salary as a sick leave benefit for up to 52 weeks if the employee has been sick for more than 10 days and is eligible.
Maternity leave & Paternity leave
Female employees are entitled to maternity leave funded by the government at a rate of 80% of their regular income for 56 days before and 56 days after the birth of a child.
In the event of pregnancy, childbirth, or postnatal complications, the birth of two or more children, and/or if the woman has begun receiving prenatal care at a preventive medical institution by the 12th week of pregnancy and has continued throughout the entire period of pregnancy, the employee is entitled to an additional 14 days of leave in addition to the prenatal leave.
The father of a newborn kid in Latvia is now entitled to up to 10 days of paid leave, which he may take at any time within the first 6 months after the birth of his child.
Each employee is entitled to take up to 15 months off work following the birth or adoption of a child until the child turns 8. It may be granted all at once or in instalments. Both parents are eligible for leave time to care for their children.
What are the minimum vacation days?
You’re eligible for paid vacation if you’ve worked for the same company for at least 6 months. The minimum time an employee may be absent without pay is 20 days. Annual paid leave in the current year may be granted in instalments, with the employee’s and the employer’s agreement, but no instalment of vacation shall be less than two consecutive weeks.
Health Security & Private Insurance
Anyone who has worked for an employer for at least three months within the previous fifteen months is entitled to free medical and dental care through the Social Security Administration.
*Native Teams can support you in finding the best private insurance in the country. Contact us and we will send a comparison of insurance packages and prices.*
Relocation and Work Permits
Native Teams will apply for your work visa in the nation on your behalf and serve as your Employer of Record. All the required documents can be uploaded using our app. Until you have your work and residency visa, Native Teams will support you by providing you with frequent information on the progress.
How long is the Visa / Work Permit process?
2 to 4 weeks depending on the authorities and provided documents.
Which documents do you need?
To apply for a visa/work permit in Latvia, upload the documents from our onboarding list (relocation to log in/pricing).
Why use Native Teams for Hiring in Latvia?
Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:
- No paperwork: We will handle all the necessary paperwork for you.
- Save on taxes: We help you handle your taxes.
- No company set up: You can expand your business using our company entitles.
- Online onboarding: We’re here to ensure your onboarding process is trouble-free.
- No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
- Increase your profit: We assist you in growing your business and maximizing your profits.
- Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
- Local support: We can assist you in understanding and complying with the relevant local laws.
*Note: The provided information was accurate at the time of writing.