How to hire and pay employees in Latvia

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Latvia

Before hiring

EMPLOYEES IN
Latvia

Before hiring employees in Latvia, there are a few important things you’ll need to know. Firstly, in Latvia, employees are entitled to four weeks of paid annual leave. This can be divided in several parts, but at least one of them must be of at least two subsequent weeks.

In Latvia, employment can be terminated by either party as long as "appropriate" notice is given, which can be between 10 and 30 days. 

We know this might sound overwhelming—but it doesn’t have to be. A solution like Oyster eliminates the barriers for you. With Oyster, you can automate compliance across 180+ countries, easily managing HR and payroll—all in one, easy-to-use platform. 

Get an overview of what you need to know when hiring in Latvia below.

At a glance

CURRENCY

EUR

OFFICIAL LANGUAGE

LATVIAN

PAYROLL FREQUENCY

MONTHLY

PUBLIC HOLIDAYS

12

(based on region;
see here
)

EMPLOYER TAXES

~24%

of gross salary

13th / 14th SALARY

N/A

Good to know

  • In Latvia, employees that adhere to non-compete agreements are entitled to compensation of at least 40% of their average salary for the full duration of the clause.
  • Overtime work in Latvia cannot exceed eight hours on average within a seven-day period, calculated in a reference period that does not exceed four months.
  • Severance pay is calculated according to employees' length of service and can range from one to four months' wages.

Labor laws in

Latvia

Working hours and overtime

Normal working hours in Latvia are eight hours per day and 40 hours per week. 

Any overtime work over the standard hours is paid at double the rate of regular wages.

Overtime work cannot exceed eight hours on average within a seven-day period, calculated in a reference period that does not exceed four months.

Employment contracts

Probationary period

The probationary period in Latvia is no more than three months.

Pensions

IP protection and non-compete agreements

Non-compete agreements must be clear and not exceed two years in duration. During the non-competition period, the employee is entitled to compensation amounting to at least 40% of their average salary at the time of the termination.

Calculate costs to hire internationally

Benefits and leave in

Latvia

Vacation time

Employees in Latvia are entitled to four weeks of paid annual leave. This can be divided in several parts, but at least one of them must be of at least two subsequent weeks.

Sick leave

Employees in Latvia are entitled to 10 days of employer-paid sick leave. For these 10 days, they are paid 75% of their salary for days two to three, and at 80% of their salary for days four to 10.

From the 11th day onwards, the employee must provide a medical certificate in order to apply for social support in the form of sick pay, which is paid at 80% of their salary for up to 26 weeks.

Parental leave

Holidays

View a list of recognized public holidays in Latvia here.

Employer tax

In Latvia, an employer’s total social contributions total are around 24%. 

Individual tax

In Latvia, employees pay a flat rate income tax of 23%. Employees pay social security tax at a rate of around 11%. In Latvia, income levels above EUR62,800 are subject to solidarity tax, paid at the same rate as social security contributions.

Termination in

Latvia

Employees should be paid a severance pay according to their length of service. The breakdown is as follows:

  • Up to five years’ service: One month’s wages
  • 5-10 years’ service: Two months’ wages
  • 10-20 years’ service: Three months’ wages
  • 20+ years’ service: Four months’ wages
Notice period

Employment can be terminated by either party as long as "appropriate" notice is given, which can be between 10 and 30 days.

The notice period for resignations is one month.

Start hiring employees in

Latvia

Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast. 

We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities. 

With Oyster, you can manage HR and payroll, and automate compliance across 180+ countries—all in one, easy-to-use platform.


Disclaimer: The information provided in this resource is for general educational purposes only and shall not be construed as legal advice. While Oyster strives to provide current and accurate information, Oyster makes no warranties or representations as to the correctness of the content provided and accepts no liability or responsibility for any errors or omissions in the content provided. By using this resource you acknowledge and agree that you do so at your own risk. The content of this resource is subject to change without notice.

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