Latvia employment laws at a glance
Currency € (Euro) | Minimum monthly salary $778 (€740) | Working hours 40 hours per week |
Overtime 100% rate minimum, maximum 8 hours per week | Employer taxes ~23.59% of gross salary | Public holidays 12 days per year |
For full details, read our guide to employment laws in Latvia.
Key considerations when hiring in Latvia
Hiring in Latvia requires compliance with labor rules and administrative processes. Here’s what to be aware of:
Compliance
- Employers must provide 20 days of annual leave, sick pay, and maternity benefits under Latvia’s Labour Law
- Social security contributions total 23.59% of gross salary, covering pension, health, and unemployment insurance; the minimum wage is $778 per month
- Payroll errors or non-compliance can result in fines, back payments, and VSAA audits
Entity setup
- Company registration takes 1–2 weeks via the Commercial Register, costing $235–$540 depending on processing speed
- Additional setup expenses include notary fees ($28–$110), legal address rental ($190+ per year), and document preparation ($160+)
- Ongoing compliance requires monthly accounting ($160–$325), annual legal fees ($525–$2,160), and regular tax and reporting filings
Legal risks
- Worker misclassification or termination errors can trigger disputes and penalties
- Payroll violations like late payments or incorrect social contributions attract audits and fines
- Foreign employers must ensure proper work permit sponsorship to prevent immigration violations
These hurdles slow down hiring. An EOR removes these barriers by managing compliance, payroll, and HR responsibilities.
What is an employer of record in Latvia?
An Employer of Record in Latvia is a third-party legal employer that enables foreign companies to hire local talent without establishing a local entity. While your company retains day-to-day management of employees, the EOR handles payroll processing, tax filings with the State Revenue Service (VID), employee registration with the State Social Insurance Agency (VSAA), and compliance with Latvia’s Labour Law.
The EOR also manages employment contracts, statutory benefits, and work permits for foreign hires — making it the right option for companies that want faster market entry, lower setup costs, and full compliance with Latvian employment regulations.
Typical hiring timeline:
- With an EOR: 24–48 hours
- With entity setup: 1–2 weeks
EOR vs entity — cost savings and benefits
Entity setup vs an EOR comes down to cost and speed. A local entity requires significant upfront investment and ongoing administrative costs. An EOR eliminates registration fees and provides immediate hiring capability with built-in compliance management.
Here’s a cost comparison of hiring with an entity vs an EOR in Latvia:
Expense category | Hiring via local entity | Hiring via EOR |
Company registration fees | $232–$518 | No setup cost |
Legal and accounting advisory | $527–$2,110 annually | Included |
Chamber of Commerce fees | $158 annually | Included |
Payroll vendor fees | $53–$158 per month | Included |
An EOR does more than save money. It keeps you compliant with Latvia’s payroll, tax, and labor laws — and makes hiring costs predictable.
Step-by-step — how an EOR simplifies hiring in Latvia
Step 1: Contracts and compliance
Employment contracts in Latvia must comply with the Labour Law and include specific mandatory clauses — probationary periods, termination procedures, and confidentiality terms. All agreements must be in Latvian or include certified translations. The Labour Law mandates written contracts within one month of employment start.
Latvia contract essentials under Labor Law:
Probationary period | Termination notice | Severance pay |
Up to 3 months (6 months with collective agreement) | 1 month standard, 3 days during probation | 1–4 months based on service length |
The EOR:
- Drafts compliant contracts aligned with Latvia’s Labour Law requirements
- Updates contracts when labor laws change or wage reforms occur
- Maintains documented procedures for warnings and notices
- Provides certified translations and handles official registrations with authorities
Watch how an EOR helps you onboard in minutes
Step 2: Payroll and compensation
Payroll in Latvia requires strict compliance with monthly payment cycles and comprehensive social security reporting. Employers must calculate contributions accurately and submit reports to the State Social Insurance Agency. The tax year runs from January to December with specific filing deadlines.
Payroll cycle | Monthly minimum |
Employer social security | 23.59% |
Tax year | January 1 – December 31 |
13th/14th salary | No legal requirement |
In addition to these payroll rules, employers must also cover mandatory contributions and benefits. Here’s a breakdown:
Employer costs and mandatory benefits in Latvia
Employer contributions in Latvia typically add 23.59% on top of gross salary, covering social security, health, and other mandatory funds:
- Pension: Included in 23.59% rate
- Health insurance: Covered under social security contributions
- Unemployment insurance: Part of the total 23.59% contribution
- Employee contribution: 10.5% (deducted from salary)
For a detailed breakdown, read our guide on employee benefits in Latvia. You can also use our employee cost calculator to estimate the exact monthly hiring cost in Latvia.
Step 3: Benefits, leave, and holidays
Latvia mandates statutory leave and benefits that employers must track carefully. The Labour Law specifies minimum entitlements and payment responsibilities. Coordination with the State Social Insurance Agency is required for certain benefits.
Annual leave | Public holidays | Sick leave |
20 days per year after 6 months of service | 12 days per year | 10 days employer-paid, then state coverage at 80% |
Maternity leave 112 days, 80% salary coverage | Paternity leave 10 calendar days, 80% salary | Parental leave 13–19 months options with varying compensation |
The EOR tracks statutory leave and manages entitlements, coordinates with Social Security for claims including sick leave and maternity pay, helps employers offer additional perks compliantly, and handles benefit administration and employee communications.
Step 4: Hiring foreign talent (work visas)
Latvia offers several visa categories for foreign workers:
- Residence Permit with Work Authorization and the EU Blue Card for highly skilled professionals
- Work permits are issued alongside visas or temporary residence permits
- Short-term permits are valid for 6 months; long-term permits align with residence permit duration (up to 4 years for temporary residence)
- Employers must demonstrate specific specialist needs before permit approval
The EOR sponsors and processes work permits through official channels, files paperwork, manages application tracking, ensures compliance, and handles permit renewals and status changes.
Step 5: Termination
Latvia’s Labour Law requires specific termination procedures depending on dismissal reasons. Notice periods range from no notice for gross misconduct to one month for standard terminations.
Severance calculations depend on service length and termination circumstances. Proper documentation and procedure adherence are essential for legal protection.
The EOR calculates severance and notice accurately under Labour Law requirements, prepares compliant exit documents and statutory filings, ensures proper procedures are followed throughout, and manages final payments and benefit transfers.
Key considerations when choosing an EOR in Latvia
If you’re exploring EOR options in Latvia, you need a partner who understands Latvia’s compliance landscape.
Employment in Latvia — key terms
- Labour Law (Darba likums): Primary employment legislation governing all employment relationships in Latvia — contracts, working time, and employee rights
- State Social Insurance Agency (VSAA): Government body administering social security benefits and contributions, requiring regular employer reporting
- Commercial Register (Uzņēmumu reģistrs): Latvia’s official business registration authority
Minimum wage (minimālā alga): Currently $778 per month — the legal minimum for full-time employment
When selecting an EOR provider, evaluate their local market expertise and compliance track record in Latvia. Review their technology platform capabilities and customer support responsiveness. Consider their experience with Latvia’s specific labor regulations and ongoing regulatory updates.
Why choose Multiplier for EOR in Latvia?
Latvia presents strong opportunities for business expansion — a skilled workforce, competitive costs, and a strategic EU location. With Multiplier, you skip entity setup, reduce risks, and start hiring in days.
- Fast onboarding: Onboard employees in Latvia within 24–48 hours through proven processes
- Compliance by design: Stay aligned with Latvia’s Labour Law, tax regulations, and payroll requirements automatically
- Cost efficiency: Avoid incorporation fees, hidden compliance risks, and administrative penalties
- Single platform: Manage contracts, payroll, benefits, and leave from one place
- Local expertise: HR and legal specialists in Latvia who adapt to wage reforms and labor law changes
What customers say
“What I like best about Multiplier is the way their team supports every step. They make complex things like compliance and payroll feel simple and stress free. The service team is approachable and quick to solve issues which makes the whole experience very smooth.”
— Ankit D., G2
Ready to hire in Latvia without the complexity?
Book a demo to see how Multiplier’s EOR solution can streamline your Latvia expansion today.
FAQs
What is the minimum salary for employees in Latvia?
For 2026, Latvia's legal minimum salary is $778 (€740) a month. The Ministry of Welfare reviews the rate every January, so plan for possible yearly changes.
How long does EOR setup take in Latvia?
EOR setup takes 24–48 hours. Entity registration takes 1–2 weeks plus additional setup time.
What are the main employer tax obligations in Latvia?
Employers pay 23.59% social security contributions, plus income tax withholding and other statutory requirements.
Can an EOR help with work permits in Latvia?
Yes. An EOR sponsors work permits and handles immigration compliance for foreign employees.
