Country Hiring Guide

Hire employees in Latvia using an Employer of Record

Your complete guide to employment laws, payroll, taxes, benefits, and compliance requirements. Learn how an EOR simplifies hiring in Latvia without setting up a local entity.

Europe
Updated September 2026

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Latvia's employment law gives workers real protections, and getting termination wrong is expensive. Dismiss someone without the right legal grounds and documented process, and you're looking at statutory severance, plus a real chance the courts side with the employee. Get the employment contract wrong (missing terms, wrong probation length, no Latvian-language version) and you're exposed to fines and a weakened legal position from day one.

Here's the practical problem: you want to hire in Latvia, but you don't have a legal entity there. That means every hire has to go through one of three paths, and each one has real tradeoffs in cost, speed, and risk.

Your three options

Option 1: Set up your own entity

  • Timeline: typically 3-6 months to incorporate, register with the State Revenue Service, and set up payroll
  • Complexity: tax registration, mandatory social insurance enrollment, payroll infrastructure, ongoing statutory filings (monthly employer reports, tax payments)
  • Ongoing cost: legal, accounting, and compliance overhead every year, regardless of headcount
  • Makes sense when: you're committing to a long-term Latvian presence with a sizeable team

Option 2: Hire contractors

  • Cost: no entity setup, but you lose employer-level control over hours and work methods
  • Timeline: immediate
  • Risk: Latvian authorities can reclassify a contractor as an employee if the relationship looks like employment in practice, triggering back taxes and social contributions
  • Makes sense when: short, defined projects under six months, or genuinely independent specialists
  • Hire with Columbus also handles compliant contractor agreements and payments, so you're covered either way

Option 3: Use an employer of record (recommended for most)

  • Cost: from $179/month per employee
  • Timeline: 2-3 days to get someone hired and on payroll
  • Complexity: none on your end. We register the employment, run payroll, handle the 23.6% employer social contribution, and manage compliance with Latvian labour law
  • Makes sense when: you're hiring 1-50 people, testing the market, or building a distributed team across countries

Why EOR usually wins the math

If you're hiring one to ten people in Latvia, entity setup and its ongoing legal, accounting, and compliance costs will almost always outrun several years of EOR fees. Three hires through Hire with Columbus runs from $537/month, no incorporation, no payroll system to build, no Latvian-language contract templates to draft from scratch.

An EOR also removes the guesswork on the details that actually create risk: the 3-month probation cap, the 20-working-day annual leave minimum, the mandatory Latvian-language contract, the social contribution filings due by the 17th of each month. We handle the contract, the payroll, the tax withholding, and the compliance updates so you don't have to track Latvian labour law changes yourself.

If you're hiring across several countries, this compounds fast. One entity per country means multiplying setup costs and ongoing overhead by every market you enter. An EOR lets you hire in Latvia this month and in another country next month, with the same predictable per-employee pricing.

Ready to hire in Latvia without setting up an entity? Get started with Hire with Columbus.

What employment types can you use?

Before you draft an employment contract in Latvia, you need to decide: entity, contractor, or EOR. That decision shapes your timeline, your costs, and how much risk you're carrying. Here's how the three approaches actually compare, followed by the contract types you'll choose from once you've picked a route.

How can you hire in Latvia?

1. Set up your own entity

Setting up a legal entity in Latvia means registering a company, opening local bank accounts, and building out payroll and tax infrastructure from scratch. The verified figures we have don't include a specific incorporation cost for Latvia, so we won't guess. Budget for legal, registration, and accounting fees on top of the time your team spends managing the process.

Ongoing costs include annual accounting, statutory filings, and compliance with Latvia's Labour Law. This route makes sense if you're planning a long-term presence with 20 or more employees and want full operational control.

Setting up takes months, not days, once you factor in registration, tax authority setup, and getting payroll running correctly.

2. Hire contractors or freelancers

Contractors let you start work almost immediately with no entity and minimal paperwork. That speed comes with a catch: Latvia's labour law looks at how someone actually works, not just what the contract calls them. If a "contractor" works fixed hours, uses company equipment, and takes direction like an employee, you're exposed to misclassification risk, including back taxes and potential legal disputes.

Contractors also can't be managed the way employees are. You can't set their schedule, dictate their tools, or integrate them fully into your team without risking that classification.

This works best for short projects under six months or highly specialized, one-off work. Hire with Columbus also handles compliant contractor agreements and payments if that's the right fit for the role.

3. Use an employer of record (recommended for most companies)

With an EOR, Hire with Columbus becomes the legal employer in Latvia while you manage the employee's day-to-day work and performance. We handle the employment contract, payroll, tax withholding, social contributions, and statutory benefits.

Pricing starts from $179/month per employee. Five hires would run from $895/month, no entity registration, no local payroll build, and Hire with Columbus typically onboards in 2-3 days.

Approach Setup time Best for Who's the legal employer
Own entity Months 20+ employees, long-term presence Your company
Contractor Days Short projects, specialized skills The contractor (self-employed)
EOR 2-3 days 1-50 employees, market testing, speed Hire with Columbus

If you're testing the Latvian market, hiring one or two people, or building a multi-country team without wanting five different entities, EOR is the fastest path to a compliant hire.

Employment contract types in Latvia

Once you've picked how you're hiring, you still need to get the contract type right. Latvia's Labour Law recognizes a few distinct forms, and each comes with its own rules.

Permanent (indefinite-term) contracts

This is the default and the right choice for core, ongoing roles. Most companies hiring in Latvia use permanent contracts because fixed terms are legally restricted to specific situations, not a general option for regular staff.

Permanent contracts must be in writing before the employee starts work. A probationary period can be included, capped at 3 months, during which either side can end the contract with just 3 days' written notice.

Fixed-term contracts

Latvian law only allows fixed-term contracts for specific, temporary situations: seasonal work, covering an absent employee, short-term spikes in workload, or emergency work following unexpected events. You can't use a fixed-term contract just because it feels lower-commitment for an ongoing role.

The maximum term, including extensions, is 5 years. Seasonal contracts specifically are capped at 10 months within a single year. If you keep renewing someone's fixed-term contract without a genuine gap of more than 60 days between contracts, it's treated as one continuous extension, and courts will look closely at whether it should really be permanent.

Part-time contracts

Part-time employees get the same statutory rights as full-time staff, just prorated for hours worked. Standard full-time hours run up to 40 hours a week, and any part-time arrangement should specify the agreed schedule clearly in the contract, especially since Latvia's rules require clarity around predictable versus variable work schedules.

Agency and posted workers

If a worker is supplied by a work placement service provider (a staffing agency), Latvian law treats that provider as the legal employer, and it must give the worker the same working conditions as a direct hire would get in that role. This is relevant if you're using a licensed local agency rather than an EOR, since only providers holding a license from the State Employment Agency can legally supply staff this way.

How Hire with Columbus handles this

Whichever contract type fits the role, we draft it in compliant Latvian form, in Latvian with a clear translation, and make sure probation length, notice terms, and remuneration details meet Labour Law requirements before your new hire's first day.

How does payroll and taxation work?

Your €2,000/month hire in Latvia doesn't cost you €2,000 a month. Once you add employer social contributions and a small state fee, you're looking at about €2,472 a month, before you've even thought about paid leave or a 13th check (there isn't one, more on that below). Here's how the numbers actually break down.

Income tax: what gets withheld

Latvia runs a progressive personal income tax system with two bands for 2026.

Annual income Rate
€0 to €105,300 25.5%
Above €105,300 33%

Employees get a non-taxable monthly minimum of €550 (€6,600 a year) applied through a payroll tax booklet system. If an employee hasn't registered their tax booklet with you as employer, you withhold without the allowance, so it's worth chasing this on day one. Income above the €105,300 social-contribution ceiling also triggers an annual solidarity-tax reconciliation, which matters if you're hiring senior or highly paid staff.

Social security contributions

Latvia's mandatory state social insurance contributions (MSSIC) split between employer and employee:

Contributor Rate
Employer 23.59%
Employee 10.5%
Combined 34.09%

These contributions apply up to an annual ceiling of €105,300 per employee (old-age, invalidity and survivors' insurance). Earnings above that are handled through the solidarity tax mechanism, not standard payroll contributions.

There's also a minimum contribution floor. If someone's declared quarterly income comes in below €2,340 (equivalent to €780 a month), the State Social Insurance Agency calculates a minimum contribution amount and you, as employer, have to top up the difference. This mostly bites with part-timers or people juggling multiple jobs.

Minimum wage and average pay

The statutory minimum wage is €780 a month (2026). For context on where the market actually sits, Latvia's Central Statistical Bureau put the average gross monthly wage at €1,886 in Q2 2026, with a median of €1,527. Net figures were €1,401 (mean) and €1,168 (median), so take-home pay runs a bit under 75% of gross for a typical earner.

The fee everyone forgets

On top of contributions, employers pay a business-risk state fee of €0.36 per employee per month. It's tiny, but it's a separate line item, and it's easy to miss when you're modeling payroll costs by hand.

Payment schedule and 13th salary

Latvian law requires wages to be paid at least twice a month, unless the employer and employee agree in writing to pay monthly instead (most companies do). There's no statutory 13th or 14th salary in Latvia, so annual compensation is whatever you and the employee agree on, paid across the year.

Every time you pay someone, you also owe them an itemized statement showing gross pay, tax withheld, social contributions made, and hours worked, including any overtime, night work or holiday hours. This isn't optional paperwork, it's a statutory requirement.

Total employment cost example

Here's what a few illustrative gross salaries actually cost once contributions and the state fee are added:

Gross monthly salary Employer SSC (23.59%) Risk fee Total monthly cost
€780 (minimum wage) €184.00 €0.36 €964.36
€1,886 (average wage) €444.85 €0.36 €2,331.21
€3,000 €707.70 €0.36 €3,708.06

Budget roughly 24% on top of gross salary for employer costs, before you add paid leave accrual or any optional benefits.

Filing deadlines

Latvia runs payroll reporting on a monthly cycle through the State Revenue Service's unified tax account:

  1. Register each new employee with the State Revenue Service before their first working hour, no more than a month in advance and no later than one hour before they start.
  2. File the employer's report on contributions by the 17th of the month following the reporting month.
  3. Pay salary tax and social contributions into the unified tax account by the 23rd of the following month.

Miss the registration step and you've got an undeclared worker on your books from hour one. Miss the filing deadlines and you're chasing corrections with the tax authority instead of running your business.

Common payroll mistakes

  • Budgeting salary only and getting blindsided by the 23.59% employer contribution when the first invoice lands.
  • Forgetting the €0.36 monthly risk fee, small individually, but it needs its own line in the payroll report.
  • Missing the minimum contribution top-up for part-time or low-earning staff whose declared income falls under the €780 monthly threshold.
  • Not collecting the employee's tax booklet, which means over-withholding on income tax because the non-taxable minimum never gets applied.
  • Registering the employee late, since Latvia expects registration before the first working hour, not after.
  • Assuming a 13th salary applies because it's common elsewhere in the region; Latvia has none.

Doing it yourself vs. letting someone else handle it

Running Latvian payroll in-house usually means a local accounting firm on retainer, payroll software that speaks Latvian tax rules, and someone on your team tracking the 17th and 23rd deadlines every single month. Get a filing wrong and you're the one explaining it to the State Revenue Service.

With Hire with Columbus, we register the employee, run the monthly filings, calculate contributions (including the minimum top-up if it applies), and issue compliant payslips, starting from $179/month per employee. You get one clean invoice; we handle the Latvian side of things.

Okay, that's a lot of legal jargon.

Here's the thing: you don't actually need to remember any of this. That's literally what we're here for. We'll handle the compliance while you focus on building your team in Latvia.

From
$179
per month
Skip the Headache, Hire in Latvia

No lawyers required. Promise.

What benefits and leave are required?

Beyond gross salary, Latvia adds employer social contributions of 23.6% on every payroll run, and that single line funds almost every mandatory benefit below: pensions, sick pay, maternity and paternity benefits, parental benefit, and unemployment support. Get the leave calendar wrong and you're not just annoying an employee, you're breaching the Labour Law. Here's what's actually required.

Annual vacation

Every employee gets a minimum of 20 working days of paid annual leave, not counting public holidays. Leave accrues through the year and, once an employee has worked six months for you, they can request their first full year's leave and you have to grant it.

At least one block of leave each year has to be two uninterrupted weeks; the rest can be split by agreement. Leave generally can't be transferred beyond the following year, and it can't be paid out in cash except when someone leaves the company with unused days on the books.

Some employees get extra days on top of the 20: three working days for anyone caring for three or more children under 16 (or a disabled child under 18), at least three working days for special-risk work, and at least one day for those caring for one or two children under 14. This supplementary leave can't be cashed out either, except at termination.

Sick leave

Sick pay splits between you and the state, and the split point is day 10. For days two and three of an illness, you pay at least 75% of the employee's average earnings out of your own pocket. From day four through day nine, that rises to at least 80%. That's the full extent of employer-funded sick pay, capped at nine calendar days.

From day 10 onward, the State Social Insurance Agency (VSAA) takes over, paying a sickness benefit equal to 80% of the employee's average insured wage. Certification works in two stages: a doctor issues sick-leave certificate A for the first nine days, then certificate B once the agency's payments begin. Sickness benefit runs for up to 26 weeks per illness, extendable to 52 weeks with a medical commission opinion.

Maternity, paternity and parental leave

Maternity leave is 112 calendar days total, split into 56 days before birth and 56 days after, and it doesn't matter how the pre-birth days are actually used. That extends to 140 days (70 + 70) if the mother started prenatal care by week 12 of pregnancy, or if there are complications or multiple births. None of this is employer-funded: VSAA pays a maternity benefit at 80% of average insured salary, and you can't touch her job while she's on it.

Fathers get 10 working days of leave, usable any time within six months of the birth, paid through a state paternity benefit rather than by you. Adopting families get a separate 10 calendar days for one of the adopters.

After that, either parent can take parental leave of up to one and a half years, usable any time until the child turns eight, and it can be split into blocks of at least one week. Parents choose between two state benefit structures: 60% of average insured earnings paid over 13 months, or 43.75% paid over 19 months. If the parent keeps working while on leave, the benefit normally drops to half, though a temporary rule running through December 31, 2026 pays 75% instead. None of this comes out of your payroll budget, but you do need to track the leave dates and preserve the employee's position.

Public holidays

Latvia has 13 public holidays in 2026, set out in the Law on Public Holidays, Commemoration Days, and Celebration Days. Employees don't work these days, and if you need someone to work anyway, you owe them a rest day on another date or a pay premium of at least 100%, the same rules that apply to overtime.

Some years the government also shifts a single working day sitting between a holiday and the weekly rest period, to create a longer break, and this isn't a holiday itself. In 2026 that happened twice: the working day from Friday, January 2 moved to Saturday, January 17, and the working day from Monday, June 22 moved to Saturday, June 27. Working those shifted Saturdays isn't treated as overtime, so don't pay the premium for them.

Mandatory contributions and benefits

Latvia funds its safety net through one combined social insurance contribution rather than separate line items for pension, health, and unemployment. The standard split is 23.6% from you and 10.5% from the employee, withheld from gross pay.

Contribution Paid by Rate
Social insurance (pension, sickness, maternity/paternity, parental, unemployment) Employer 23.6%
Social insurance Employee 10.5%
Business-risk state fee Employer €0.36 per employee/month

On a €2,000 gross salary, that works out to roughly €2,472 in listed employer costs before you add anything else, since the employer share plus the small risk fee stack on top of the base salary.

There's a ceiling: contributions for old-age, invalidity, and survivor insurance are capped at €105,300 of annual income per employee. Earn above that and different rules kick in, so get specialist payroll advice rather than guessing.

There's also a floor. If someone's declared income falls below the minimum contribution object (€780 a month or €2,340 a quarter in 2026), VSAA calculates a shortfall and you owe the difference. This mostly bites part-time or low-hours arrangements, so don't assume a small salary means small contributions.

One more thing worth flagging: Latvia has no mandatory 13th or 14th salary. Any bonus or extra payment has to be agreed in the contract or collective agreement; it's not a legal default.

Optional benefits that help you compete

The statutory minimums won't win you competitive candidates in Riga's tighter talent pool. Companies commonly add private health insurance, extra vacation days on top of the 20-day floor, remote-work or home-office stipends, and professional development budgets.

Some employers also top up state sickness or parental benefits to bring take-home pay closer to full salary during those periods, since the state replacement rates (80% for sickness, 60% or 43.75% for parental leave) leave a real gap for higher earners.

Common benefit mistakes

  • Treating annual leave as cash-convertible. It isn't, except at termination. Employees can't choose a payout instead of time off while still employed.
  • Missing the sick-pay handoff. Employers sometimes keep paying past day nine instead of switching the employee to the VSAA benefit claim, or fail to collect certificate B, which stalls the state payment entirely.
  • Assuming a 13th salary is required. It's not, but plenty of companies budget as if it is, or forget to document bonuses properly when they do pay them.
  • Dismissing someone during protected leave. You generally can't terminate a pregnant employee, someone on parental leave, or someone on sick leave, except for a narrow set of statutory grounds. Get this wrong and you're looking at reinstatement claims, not just a fine.
  • Ignoring supplementary leave for parents and hazardous-work employees. It's easy to configure a standard 20-day policy and miss the extra days certain employees are owed by law.

Running all of this correctly usually means a dedicated local HR resource, payroll software that understands Latvia's contribution ceilings and floors, and periodic legal review, costs that add up fast for a single hire. Hire with Columbus handles the vacation tracking, sick-pay handoffs, maternity and parental leave administration, and contribution filings from $179/month per employee, so you're not the one calling VSAA to figure out why a benefit payment stalled.

What are the compliance requirements?

Miss one mandatory clause in a Latvian employment contract and you risk the whole agreement being challenged. Latvian labour law (the Darba likums) is detailed on what has to be in writing, when notice applies, and how much severance is owed. Here's what you actually need to get right.

Employment contract requirements

Contracts must be in writing and signed before the employee's first day. There's no grace period, if work starts without a signed contract, you're already exposed.

The contract should be in Latvian, with an understandable translation provided if the employee doesn't read Latvian. Under Section 40, it must include:

  • Full names, personal identity numbers (or date of birth for foreign nationals without one), and addresses of both parties
  • Start date, and end date if it's fixed-term
  • Workplace, or a statement that the employee can choose their own
  • Job title/occupation matching Latvia's official Classification of Occupations
  • Remuneration amount and payment schedule
  • Daily or weekly working hours, or a note that the schedule is variable

Before the employee's first working hour, you also need to register them with the State Revenue Service. Registering late is one of the most common (and cheapest to fix, if caught early) compliance slips companies make.

Fixed-term contracts are only allowed for specific situations: seasonal work, covering an absent employee, temporary spikes in workload, and similar. A fixed-term contract can't run longer than five years including renewals, and seasonal contracts cap out at 10 months within a year.

Probation periods

Standard probation is up to 3 months. Under a collective agreement with a trade union, it can stretch to 6 months, but not by default.

For fixed-term contracts, probation shrinks: no more than 1 month if the contract runs up to 6 months, and no more than 2 months if it runs up to a year.

During probation, either side can end the contract with just 3 days' written notice, no reason required. Once probation passes (including if you simply let the employee keep working past the agreed date), full termination protections apply.

Working time regulations

Regular working time is 8 hours a day and 40 hours a week. In practice, average actual hours across the workforce currently run around 38.5 a week.

Other rules to build into your payroll and scheduling:

  • Breaks: at least 30 minutes if the workday exceeds 6 hours, granted within 4 hours of starting
  • Daily rest: at least 12 consecutive hours between shifts
  • Weekly rest: at least 42 consecutive hours, normally including Sunday
  • Overtime: requires the employee's written agreement (with narrow exceptions for emergencies), and can't exceed an average of 8 hours a week over a reference period of up to 4 months
  • Overtime and public holiday pay: a premium of at least 100% on top of the normal hourly or daily rate

You also need to issue an itemized pay statement each payday showing remuneration, taxes withheld, and hours worked, including overtime and night hours.

Notice periods

Employee resignation: 1 month's written notice, unless the contract or collective agreement sets a shorter period. Employees on temporary/active-employment-measure work can resign with just 1 day's notice.

Employer-given notice depends entirely on the legal ground for dismissal:

Dismissal ground Employer notice period
Employee acted illegally or lost employer's trust; under influence of alcohol/drugs at work; health-certified incapacity Without delay
Contract breach without justification; conduct against moral principles; gross safety violation 10 days
Lack of occupational competence; reinstatement of a previous employee; redundancy; employer liquidation 1 month
Same grounds as above, employee has recognized disability status 2 months

There's no such thing as at-will termination in Latvia. Every dismissal needs a documented, legally recognized reason, and the notice period tied to that reason.

Termination process

You can only dismiss an employee for reasons tied to their conduct, ability, or genuine economic/organizational/technological need (redundancy). "Not a culture fit" isn't a lawful ground on its own, you need one of the specific grounds set out in Section 101.

Some employees have extra protection:

  • Pregnant employees and women up to 1 year after childbirth (2 years if breastfeeding) can't be dismissed except on a short list of grounds unrelated to performance
  • Employees on sick leave can't be dismissed during their incapacity, with one narrow exception
  • Trade union members of more than 6 months' standing generally need the union's prior consent before you can issue notice

If you're letting go of a meaningful chunk of your workforce at once, collective redundancy rules kick in:

  • 5+ employees within 30 days, if you normally employ 20-49 people
  • 10+ employees, if you employ 50-99
  • At least 10% of staff, if you employ 100-299
  • 30+ employees, if you employ 300 or more

Final pay, including any unused leave and severance, is due on the day of dismissal (or the next business day if the employee wasn't at work that day).

Severance pay

Where a collective agreement or contract doesn't set a higher amount, statutory severance applies when dismissal is for redundancy, liquidation, lack of competence, health incapacity, or reinstatement of a prior employee:

Tenure with employer Severance
Under 5 years 1 month's average earnings
5 to 10 years 2 months' average earnings
10 to 20 years 3 months' average earnings
Over 20 years 4 months' average earnings

Severance is also owed if an employee resigns for an important reason the employer accepts. Across all termination scenarios, statutory severance in Latvia averages out to roughly 8.7 weeks of pay, though the actual number for any one employee depends entirely on their tenure and the dismissal ground.

Data protection

Latvia applies GDPR in full. That means you need a lawful basis for collecting employee data, you only collect what's genuinely needed for the employment relationship, and you don't keep it longer than necessary.

Biometric data (fingerprints, face scans for building access, etc.) gets extra scrutiny. Latvia's data authority treats it as a special category, and employers generally need to show it's genuinely necessary, not just convenient, or rely on freely given, specific consent.

Common compliance mistakes

  • Letting someone start work before the contract is signed. The written contract requirement isn't a formality, it's the basis for the whole employment relationship.
  • Dismissing without a documented legal ground. "Restructuring" needs to actually be an economic/organizational measure, not a workaround for a personality clash.
  • Skipping severance because the employee resigned. If they resigned for a reason you accepted as important, severance still applies.
  • Ignoring union consent requirements. Dismissing a union member of 6+ months without consent can unwind the whole termination.
  • Non-compete clauses without ongoing pay. A post-employment restriction is only enforceable if you pay the employee monthly compensation for the whole restricted period, up to a maximum of 2 years.
  • Missing the registration deadline. Employees must be registered with the State Revenue Service before their first working hour, not after.

Penalties for violations

Latvian law puts real numbers on some of these failures. Under Section 158, failing to put an employment contract in writing carries a fine of 14 to 70 fine units for an individual employer, or 140 to 720 fine units for a company.

Beyond the statutory fine, getting termination wrong tends to cost more in practice: back pay for the notice period you skipped, the severance you owed but didn't pay, legal fees defending the dismissal, and in some cases a court-ordered reinstatement.

This is exactly the kind of detail that's easy to get wrong when you're managing Latvian employment law from another country. Hire with Columbus employs your Latvian team on your behalf, from $179/month per employee, and handles the contract, probation terms, notice calculations, and severance math according to current Latvian law, so a missed clause or a wrong notice period doesn't become your problem.

What has changed recently?

Latvia updated several numbers for 2026, and a few of them change what a Latvian hire actually costs or how fast you can get someone onboarded. Here's what's different this year.

Minimum wage and contribution base moved up

The minimum monthly wage rose to €780 from 1 January 2026. That's the floor for regular working time, and it also resets the minimum contribution base the State Social Insurance Agency uses to check that employers aren't under-declaring income (€780 a month or €2,340 a quarter for 2026). If you're paying anyone close to minimum wage, run the math again for this year rather than reusing 2025 figures.

Social contribution rates themselves held steady: employers still pay 23.6% and employees 10.5%. The €0.36 monthly employer risk fee also stayed flat for 2026, which is one less thing to budget around.

Income tax allowance and the solidarity threshold

The non-taxable minimum for 2026 is €550 a month (€6,600 a year), applied through the payroll tax booklet system. Latvia's income tax stays progressive: 25.5% up to €105,300 of annual income, 33% above that, and the €105,300 figure is also where the employer social contribution ceiling and solidarity tax mechanics kick in. If you're bringing on a senior hire above that threshold, factor the higher marginal rate and the solidarity calculation into your offer planning.

Parental and paternity benefit rules shifted

A law amended in November 2025 changed provisions around paternity benefit, effective 1 January 2026. Paternity leave itself is still 10 working days, usable within six months of the birth.

Two other dates matter if you're managing a Latvian employee through parental leave:

  • From 1 July 2026, the state can stop parental benefit payments if the registered child has no Latvian personal code and doesn't live in Latvia, unless EU coordination rules apply.
  • The rule letting working parents keep 75% of their awarded parental benefit (instead of the standard 50%) only runs through 31 December 2026, so anyone counting on that rate needs to plan around the cutoff.

The Ministry of Welfare has also proposed folding the current 13-month and 19-month parental benefit options into a single 548-day benefit at a 70% replacement rate, targeted for 1 January 2028. That's a proposal, not law yet, but it's worth watching if you're hiring someone likely to start a family during their tenure.

Immigration salary thresholds reset

For applications from 1 April 2026, the EU Blue Card salary threshold is €2,723 a month, and the reduced threshold for roles on the recognised labour-shortage list is €2,178 a month. If you're sponsoring a non-EU hire, check which threshold applies before you finalize the offer letter, since getting it wrong means a rejected application and a delayed start date.

Two working days got shifted in 2026

The government moved two working days for 2026: Friday 2 January shifted to Saturday 17 January, and Monday 22 June shifted to Saturday 27 June. This isn't a public holiday change, it's a rescheduling that affects payroll and attendance calendars if your Latvian team follows the government's recommended schedule. Worth flagging to your payroll provider before those weeks arrive.

Wages are climbing faster than expected

Latvia's statistics office reported average gross monthly pay of €1,886 for Q2 2026, up 4.3% year over year, with the median at €1,527. Private-sector pay grew faster than public-sector pay this year. If your salary benchmarks are more than a year old, they're already behind the market.

Keeping up with all of this is exactly the kind of thing that eats a week of an HR manager's time every quarter. Hire with Columbus tracks these updates as part of the from $179/month per employee EOR fee, so your Latvian payroll, contracts, and benefits stay current without you having to monitor Latvijas Vēstnesis yourself.

Frequently asked questions

How much does an EOR cost in Latvia?

Employer of Record pricing in Latvia starts from $179 per employee per month, with no setup fees and no deposits. That fee covers registering the employment, running payroll, handling the employer social contribution, and managing compliance with Latvian labour law. For example, three hires through Hire with Columbus would run from $537 per month, with no incorporation or local payroll build needed.

Can I hire employees in Latvia without setting up a local entity?

Yes. An Employer of Record legally employs the worker on your behalf in Latvia, so you can hire without opening a local entity, registering with the State Revenue Service, or building payroll infrastructure yourself. This is typically the fastest route if you are hiring between one and fifty people or testing the Latvian market.

How long does it take to hire someone in Latvia?

Hire with Columbus typically onboards in 2-3 days through an Employer of Record in Latvia, once the worker is qualified and compliant. This compares to 3-6 months if you set up your own entity to register with the State Revenue Service and build out payroll.

What does an employer pay on top of gross salary in Latvia?

On top of gross salary, employers in Latvia pay a mandatory state social insurance contribution of 23.59% (referred to elsewhere in the guide as 23.6%), plus a small business-risk state fee of €0.36 per employee per month. On a €2,000 gross salary, this brings the total employer cost to roughly €2,472 a month, meaning employers should budget roughly 24% on top of gross salary for these costs.

What is the notice period for terminating an employee in Latvia?

Notice periods depend on the reason for dismissal. Employees resigning owe 1 month's written notice, while employer-given notice ranges from without delay for serious misconduct, to 10 days for contract breach, to 1 month for redundancy or lack of competence, and 2 months if the employee has recognized disability status. During the probation period, capped at 3 months, either side can end the contract with just 3 days' written notice.

Is a 13th-month salary mandatory in Latvia?

No, a 13th-month salary is not mandatory in Latvia. The guide explicitly states there is no statutory 13th or 14th salary, so any such bonus has to be agreed in the employment contract or collective agreement rather than being a legal default.

How much paid leave are employees entitled to in Latvia?

Employees in Latvia are entitled to a minimum of 20 working days of paid annual leave, not counting public holidays, with at least one block of two uninterrupted weeks required each year. Some employees get extra days on top of the 20, such as three working days for those caring for three or more children under 16, or at least one day for those caring for one or two children under 14.

What is the difference between hiring an employee and a contractor in Latvia?

Employees work under a written contract that gives you control over hours, tools, and integration into your team, and comes with statutory protections like notice periods and severance. Contractors are self-employed, can start almost immediately with no entity, but cannot be managed the same way, since Latvian labour law looks at how someone actually works rather than the contract label. If a contractor works fixed hours, uses company equipment, and takes direction like an employee, authorities can reclassify them as an employee, triggering back taxes and social contributions, so contractor arrangements work best for short projects under six months or genuinely independent specialists.

What changed in Latvia

Checked against official sources on .

No rule changes recorded since we began logging them.

Corrections to this guide

  • Corrected 11 October 2026

    Parental leave: 56.3 weeks → 78 weeksSource

    Labour Law s.156: parental leave up to 1.5 years per parent, usable until child is 8 (unpaid by employer); parental benefit (VSAA) paid for 13 months (60%) or 19 months (43.75%) incl. 2 non-transferable months per parent

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