Hire employees in Latvia
With Nomad Global Hire PEO / EoR (employer of Record) services, you can easily hire employees in Latvia, without having to set up your own entity. No risk and fully compliant with HR support included
What to know about Latvia
Latvia has a small startup industry but with a strong focus on FinTech and Education
Employer Tax
Estimated at 24%
Currency
EUR, Euros
Available Employee Benefits
Medical insurance, Meal Vouchers
Employee Tax
Incremental up to 31.4%
Payroll Frequency
Monthly over 12 payments
Main Universities
Capital
Riga
Population
Circa 1.9 Millions
Available Contracts
Fixed Term Contract, Indefinite/Permanent
Latvia ranks 43rd globally by StartupBlink. Most startups oin the country are base din the capital Riga. The main industries represented in the Latvian Startup ecosystem are FinTech, Education and Hardware. Although a small country, Latvia has much to offer to companies looking to implement activities and operations in North East Europe. If this is your company’s target, NOMAD can support your international expansion by hiring locally your employees so you don’t have to open your own entity, which can be a costly, risky and long process thanks to our Employer of Record Services.
Payroll, Benefits & Tax in Latvia
- Minimum salary in Latvia is 1130 Euros Gross per month
- Employer Tax in Latvia is usually 24%
- This includes Social Security mainly
- Employee Tax in Latvia is incremental up to 31.4%:
- There is a Flat Rate 20% Tax on amounts up to 20,000 EUR per year
- Income Tax is then at a flat rate of 23% for the income between 20,000 and 63,000 Euros of annual income
- Income Tax then steps to 31.4% for the income in excess of 63,000 Euros
- Overtime in Latvia has to be paid by law and is limited to 200 hours annually and can be compensated up to 200% of the standard hourly rate of the employee. Employees cannot work more than 8 hours overtime per week.
- Payroll Frequency in Latvia is Monthly over 12 months
- Maternity Leave in Latvia is up to 112 paid days. The Mother has to take 56 days before the birth date and 56 days after the birth of the child. During this time, leave is paid at 80% by the Social Security Fund.
- Paternity Leave is 10 days or 2 weeks. The salary during those 2 weeks will also paid at 80% by the Social Security Fund
- Parental Leave is up to 1,5 year in Latvia until the child reaches 8 years of age. It can be taken in several parts.
- Sick Leave is covered for up a maximum of 52 weeks in a 3 years period.
- Statutory Leave is 20 days minimum per year, and employees can start using annual leave only after 6 months of work
- Bank holidays: there are 12 national days in 2023 in Latvia. List is Here
- Termination can be complex in Latvia, see below
- Notice period is minimum 1 month and Severance pay is compulsory
The Latvian Labor Code is setting the framework for employment in Latvia. This covers all individual and collective working relationships, Compensation and Benefits, Workers rights as well as Leave (Sick, Parental), employment Termination and Discrimination.
Onboarding and Termination in Latvia
- Probation period are not mandatory under Latvian Labour Law however a 90 days period is advised
- Probation period in Latvia can be of a maximum of 3 months or 90 days, and therefor cannot be extended
- You can hire through Fixed Term Contracts, Indefinite / Permanent contract or BtoB contracts
- Employment Contracts must be drafted in Latvian but can also be in English (but then has to be both at the same time)
- Termination is Latvia is generally a complicated process and requires particular care. In order to be compliant, Termination can occur for Just Cause as such:
- By mutual agreement
- By resignation of the employee
- By expiration of contract
- By the employer on grounds of disciplinary dismissal (although it is restrictive and has to be tightly documented), failure to perform in probation period, reduction of work or end of the activity.
- It is always advised to reach a Mutual Agreement to validate a Termination in Latvia because the reasons allowing Termination by the employer are highly restricted and complicated
- The minimum notice period in Latvia is 1 months (or less if mutually agreed)
- Severance payments in Latvia are mandatory, especially if the employer terminates the contract on the basis of lack of Performance, reduction of workforce, health issues,etc…) and can go from 1 month to 4 months salary depending on the length of employment
- 1 month severance for less than 5 years as an employee of the company
- 2 months if 5 to 10 years
- 3 months if 10 to 20 years
Fixed Management Fee
We charge a fixed monthly fee depending on the level of the salary of the hired employee
- Local Contract Management
- Payroll Management
- Tax and Compliance
- HR Support
Employee Nomad set up fee
Everything to get you started on Nomad and ensure piece of mind for you and your new hire
- Sign up to the NOMAD Services
- Benefits Setup (if available)
- Tax authority liaisons
- An additional Deposit of 1 full month salary cost will be required
Estimated Employer tax costs
Employer Tax in Latvia is estimated around 24% (may vary depending on circumstances)
- Social Security
- Others
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