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Payroll and Benefits Guide Latvia

Last updated: Oct 03, 2021

Currency
Euro (EUR)
Employer Taxes
20.77% to 23.59%
Payroll Frequency
Monthly
Employee Costs
10.50%
Capital
Riga
Date Format
dd/mm/yyyy
Fiscal Year
1 January - 31 December
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Contribution

Employer  Employer Payroll Contributions
23.59% National Social Insurance and Solidarity Tax (NSIC) for employment with a company registered in Latvia/EU/EEA (split rate) income maximum 78,100 EUR Annually
20.77% National Social Insurance and Solidarity Tax (NSIC) for employment with a company registered in Latvia/EU/EEA (employee eligible for retirement-split rate)
20.77% to 23.59% Total Employment Cost
Employee Employee Payroll Contributions
10.50% National Social Insurance and Solidarity Tax (NSIC) for employment with a company registered in Latvia/EU/EEA (split rate) income maximum 78,100 EUR annually
9.25%
National Social Insurance and Solidarity Tax (NSIC) for employment with a company registered in Latvia/EU/EEA (employee eligible for retirement-split rate)
9.25% to 10.50% Total Employee Cost
Employee Income Tax *
20.00% up to 20,004 EUR Annually
23.00% 20,005 – 78,100 EUR Annually
31.00% 78,100 EUR and above Annually

Employer taxes

Highest
Lowest

Employee taxes

Highest
Lowest

Minimum Wage

General

The cabinet determines the minimum monthly salary in Latvia. The monthly minimum wage is 700 EUR.

MINIMUM WAGE (PER MONTH)

Highest
Lowest

Payroll

Payroll Cycle

In Latvia, the payroll frequency is generally monthly. However, the employer must make payment no less than twice a month unless the employee and employer have agreed on payment once a month.

13th Salary

There is no statutory requirement to provide a 13th salary.

Working Hours

General

The standard workweek in Latvia consists of 8 hours a day, 40 hours per week.

Overtime

Any work done above regular hours or on a public holiday is considered overtime and must also be mutually agreed upon prior to the commencement of any overtime work. Overtime hours are paid at a rate of 200% of the regular salary rate of pay.

Leave

Annual Leave (vacation)

Employees are entitled to annual leave if they have been employed for at least six consecutive months. Such leave may not be fewer than 20 days (four calendar weeks), not including public holidays. Employees under 18 years of age are entitled to annual paid leave of one month.
With the agreement of the employee and the employer, annual paid leave in the current year may be granted in parts, but one part of the leave in the current year shall not be fewer than two uninterrupted calendar weeks. With written agreement, up to 2 weeks of unused leave can carry over into the next calendar year only.

Public Holidays

Public holidays that fall on the weekend are usually lost, with the exception of Army Day which moves to a Friday or Monday when falling on a Sunday.

The length of the working day immediately before a public holiday is reduced by 1 hour.

Date Day Holiday Notes
1 Jan 2024 Monday New year’s Day
29 Mar 2024 Friday Good Friday
1 Apr 2024 Monday Easter Monday
1 May 2024 Wednesday Labor day
4 May 2024 Saturday Independence Day
23 Jun 2024 Sunday Song and Dance Festival
24 Jun 2024 Monday Song and Dance Festival Holiday
18 Nov 2024 Monday Proclamation Day
24 Dec 2024 Tuesday Christmas Eve
25 Dec 2024 Wednesday Christmas Day
26 Dec 2024 Thursday Christmas Holiday
31 Dec 2024 Tuesday New Year’s Eve

Sick Days

The first day of sickness is unpaid.

The employer pays day two & three at 75% salary and day four to 10 at 80% salary.

From day 11 onwards sick pay is compensated by the state.

Maternity Leave

The first part is paid for 56 or 70 calendar days of maternity leave. Benefits for 70 calendar days are paid if employees have been medically registered as pregnant up to the 12th week of pregnancy. The second part of the benefits is paid for 56 or 70 calendar days after the birth of the child. Benefits for 70 calendar days are paid if the employee has experienced health problems during pregnancy, birthing, in the post-natal period, or two or more babies have been born.
The longest period for which maternity benefits can be received is 140 calendar days.

Parental Leave

Paternity benefits (paternitātes pabalsts) are granted to the child’s father and also granted to one of the two adopters of a child under 3 years.
For children born on or after 1 January 2023, the total duration of the parental benefit will be set in months counted from the date of birth. The total period of parental benefit will be made up of the basic and non-transferable parts of the parental benefit. The non-transferable part will be two months for each parent.
Parents shall be able to choose.

To receive the total benefit for the time period of 13 months from the day of the child’s birth:

  • Rhe basic 9-month portion must be used by one parent until the child is one year old. This 9-month period also includes the period of maternity allowance.
  • The two-month non-transferable part can be used by the mother until the child reaches the age of eight.
  • The father can use the two-month non-transferable part until the child reaches the age of eight.
  • If you choose a period of 13 months, the amount of parental allowance is 60 % of the claimant’s average contributory salary.

(If you are not on parental leave and continue to work, you can get 50% of the basic amount of the parental benefit. The non-transferable part of the allowance can only be received if you are on parental leave or do not earn an income as a self-employed person).

Or

To receive the total benefit for the time period of 19 months from the day of the child’s birth:

  • The basic 15-month allowance must be used by one parent until the child reaches the age of one-and-a-half years. This 15-month period also includes the period of maternity allowance.
  • The mother can use the two-month non-transferable part until the child reaches the age of eight.
  • The father can use the two-month non-transferable part until the child reaches the age of eight.
  • If you choose a period of 19 months, the amount of parental allowance is 43.75 % of the claimant’s average contributory salary.

(If you are not on parental leave and continue to work, you can get 50 % of the basic parental allowance. The non-transferable part of the allowance can only be received while on parental leave or without income as a self-employed person).
Maternity and parental benefits for the same child cannot be received at the same time. If the mother of the child has been awarded maternity allowance, the parent will be able to receive the basic part of the parental allowance from the day after the end date of the maternity allowance. The amount of maternity benefit is 80% of the claimant’s average contribution salary.

 

Vacation Days
Public Holidays
Highest
Lowest

PAID MATERNITY LEAVE (DAYS)

Highest
Lowest

Termination

Termination Process

Employers can terminate a fixed term contract by giving the following reasons – business, personal, or worker’s misconduct. It requires notice and a written explanation for the termination. If the reason is misconduct, a warning needs to be given and the employee gets a chance to explain their actions.

Notice Period

The statutory notice period must be at least one month. During the probation period notice is with 3 days written notice.

Severance Pay

In Latvia, statutory severance pay is dependent on the length of service:

  • One month pay for employees with up to 5 years of service
  • Two months’ pay for employees with between 5 and 10 years of service
  • Three months’ salary for employees with 10 to 20 years
  • Four months’ pay for employees with over 20 years of service

Probation Period

Under an indefinite employment contract probation leave is typically up to three months. However, within a collective agreement, parties can agree on a probationary period of more than three months but no more than six months without reducing the overall level of protection of employees.

Under a definite term contract it is possible to provide a probationary period of:

  • Up to 1 (one) month for employment contracts for up to 6 (six) months
  • Up to 2 (two) months for employment contracts for up to 1 (one) year

VISA

VISA

Latvian law provides many options for employers of foreign nationals. Latvia is a member of the European Union (EU) and the Schengen Area. Requirements, processing times, employment eligibility, and benefits for accompanying family members vary by visa classification.
Business visitors to Latvia typically use a local version of the Schengen C Visa, unless they are visa-exempt based on their nationality. The Schengen Area limits stay to 90 days within 180 days.
The main work authorization categories are the Residence Permit with Work Authorization, available to many foreign national workers.
The EU Blue Card is suitable for highly skilled, locally hired employees who meet a salary threshold. The (EU) Intracompany Transferee (ICT) Permit is available for intracompany transfers of managers, specialists, or trainees from outside the EU.
The application process always requires an in-country application with the Office of Migration and Citizenship Affairs (OCMA). If the intended stay is under 90 days, foreign nationals may also request a residence permit, thereby choosing between a visa and a residence permit.

VAT

General

The standard rate of VAT in Latvia is 21%.

Stay up to date on payroll & employment law changes

Version History

August 1, 2022
In effect from August 2022 amendments to the Latvian Labour Law have changed probation periods.
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Payroll and Benefits Guide
in Latvia

What’s covered in this guide:

  • Employer/employee contributions
  • Minimum wage
  • Working hours
  • Visa requirements

And more...

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All questions are answered by our in-house compliance department working in conjunction with our local in-country partner for this specific country

Public Holidays Calendar

Latvia
Download:
CSV
PDF
ICS
Date Day Holiday Notes
1 Jan 2024 Monday New year’s Day
29 Mar 2024 Friday Good Friday
1 Apr 2024 Monday Easter Monday
1 May 2024 Wednesday Labor day
4 May 2024 Saturday Independence Day
23 Jun 2024 Sunday Song and Dance Festival
24 Jun 2024 Monday Song and Dance Festival Holiday
18 Nov 2024 Monday Proclamation Day
24 Dec 2024 Tuesday Christmas Eve
25 Dec 2024 Wednesday Christmas Day
26 Dec 2024 Thursday Christmas Holiday
31 Dec 2024 Tuesday New Year’s Eve