Employing in Latvia

Latvia, with its strategic location at the crossroads of major European trade routes, presents an attractive opportunity for businesses looking to expand. The country boasts a well-educated workforce, competitive labour costs, and a favourable business environment. Latvia's diverse labour market, characterised by skilled professionals in various sectors, demands strategic HR management and compliance with local employment regulations.

TopSource Worldwide provides comprehensive solutions to streamline the process of employing in Latvia. Our expertise in local employment laws and regulations ensures seamless integration into the Latvian market, offering businesses a reliable pathway to access the vibrant, diverse talent pool that Latvia offers. Whether it's navigating through employment contracts, compliance with local labour laws, or efficient payroll processing,


Our Expertise

Managing a global workforce in Latvia

Effectively managing a workforce in Latvia requires a nuanced understanding of local employment practices and cultural norms. TopSource Worldwide's tailored services in Latvia are designed to facilitate smooth business expansion and operational efficiency. By leveraging our local expertise and global experience, companies can focus on their core operations while ensuring a well-managed, satisfied workforce in Latvia.


Extensive expertise

Our team of experienced, knowledgeable staff collectively provide up-to-date employment information across 180 countries, so you can always get accurate advice.


Entity-free employment

Feel free to hire employees from all over the world without being weighed down by setting up entities, running complex payroll or recruiting a hiring team.


Payroll without hassle

Have the confidence that your staff will always be paid accurately and on time, so that you can focus on your core business activities and work towards your success. 


Always-on support

Access helpful, relevant, personalised advice whenever you need it, along with expert-led recruitment policies and tried-and-tested HR best practices.


Global Employee Cost Calculator

Estimate the cost of your new hire with our calculator. Simply enter their location and salary information in to this handy tool to see what will be spent in employment costs each month.


Hear from our clients about our EOR solutions in Latvia

"With TopSource we were able to have employees hired or maintained in Nutreco without having to establish an entity in these countries for only 1-2 employees. I think most countries are covered by TopSource, so they can help us with almost all cases. Good advice on conditions and direct contact with employees. Invoicing done directly to the company. An easy process compared to hiring employees by ourselves."

Annette van Duijnhoven

”We searched the market for a local payroll vendor in 2014 and we chose TopSource as our partner. We were looking for error-free and timely payroll processing and TopSource Worldwide delivers this, saving us time and money. We have worked together for 8 years now and would recommend them to anyone."

Praveen Lihinar

”TopSource Worldwide has a detailed and methodical onboarding process that made it easy for us to get set up and running with our UK employees. They were able to take the worry out of trying to comply with all local laws and regulations. Because they have this knowledge we do not have to research on our own and hope we are in compliance. This has saved us hours of time and gives both the company and employees a sense of security."

Client based in Ft Worth, Texas, USA

Personalised Employer of Record services in Latvia

TopSource Worldwide offers personalised Employer of Record (EOR) services tailored to meet the specific needs of your business in Latvia. This includes handling employee onboarding, payroll processing, tax compliance, employee benefits management, and HR support. Our EOR services ensure that your business meets all legal and regulatory requirements, providing a hassle-free solution to manage your Latvia-based employees.

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End-to-end Latvia payroll services

Looking to expand into Latvia? Our unparalleled expertise in global payroll services ensures that your business can seamlessly navigate the complexities of payroll on a global scale, supporting your Latvia expansion initiatives.

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Global entity management

Venturing into the Latvian market can be both exciting and challenging. With distinct business regulations, cultural nuances, and economic landscapes, it's essential to have a clear roadmap for your business establishment journey.

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Whether your goal is to process your purchase-to-pay transactions with minimum errors or manage your expense claim procedure, our team of experts can handle your accounting responsibilities, allowing you to focus on your core business and save time and money.

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Global EOR services

Managing a diverse global workforce can be complex. This is where TopSource steps in as an invaluable employer of record services partner for companies seeking to expand their global reach while ensuring compliance with local employment laws and regulations.

Global Expansion Simplified

How to do business in Latvia

Entering the Latvian market presents a mix of excitement and challenges. Given unique business regulations, cultural intricacies, and economic dynamics, a well-defined roadmap is crucial for a successful business establishment.

TopSource Worldwide is with you at every stage. Whether it's navigating local regulations or facilitating seamless operational transitions, our expertise ensures a swift and efficient process for establishing your business in Latvia.


Latvia Insights

Key insights into Latvia's landscape


VAT rates: Latvia has a standard Value Added Tax (VAT) rate of 21%, with reduced rates of 12% and 5% for specific goods and services.


Ease of Doing Business rank: Latvia ranks 19th in the World Bank's Ease of Doing Business Index, indicating a favourable business environment.


Consumer Confidence Index: Latvia's Consumer Confidence Index currently sits at approximately 94.80, reflecting stable economic sentiment.


Employee maternity/paternity leave: Maternity leave is 16 weeks, and paternity leave is 10 days, supporting work-life balance for new parents.


Employee termination period: Standard notice for termination is typically 1 to 3 months, depending on employment contract terms and length.


Employee salary pay date: Employees should be paid monthly between the 1st to the 5th of each month.


Bank holidays: Latvia observes public holidays, including Līgo Day and Jāņi Night, Independence Restoration Day, Proclamation of the Republic of Latvia and Christmas, with a total of around 12 public holidays in a year.

An overview of employing in Latvia

Salary currency

Euros (€)


The minimum pay for full time workers should not be lower than 500 EUR per month (2022).


There is no statutory bonus in Latvia.
Any supplementary bonuses should be outlined in the contract of employment.

Social security system

Latvian Social Security is governed by the State Social Insurance Agency of the Republic of Latvia (VSSA) and covers all benefits relating to sickness, maternity, disability, pension, unemployment and workplace compensation.

Monthly contributions are made by both the employer and employee.


Latvia has a state-funded national healthcare system (Nacionalais veselibas dienests) , which provides healthcare to all citizens of Latvia and employees who make social security contributions. Medical care and treatment in Latvia are often subject to a user charge, capped at an annual amount of EUR 569.15.

Employers may choose to offer supplementary private medical insurance for their workers, offering access to better facilities and more comprehensive care.

Employer Costs

Social insurance is paid by the employer at a rate of 23.59% of the employee’s monthly wage.
Social Security contributions are capped at EUR 78,100 (2022)

Employees earning more than EUR 78,100 annually are required to pay a solidarity tax. This is paid at the same rate as social security (23.59% for employers; 10.5% for employees).

Employers are entitled to reimbursements for their contributions.

An overview of the main statutory benefits


The state-funded pension is granted to all citizens, upon reaching pensionable age, who have accrued the required social security contributions.

The retirement age in Latvia 64 years and is set to rise to 65 by 2025.

Latvia operates a three-tier pension system, combining mandatory and voluntary payment plans for Latvian citizens. Employers may opt to enrol their employees in a private occupational pension plan as part of the third pillar, voluntary payment scheme.


Employees are entitled to sick leave pay upon presentation of a medical note.
The first ten days of illness are covered by the employer:

  • The first day of leave is unpaid

  • 2nd and 3rd days of illness – not less than 75% of employee’s average salary

  • 4th to 10th day of illness – not less than 80% of employee’s average salary
 From the eleventh day, all subsequent leave is covered by Social Security for up to 26 weeks at a rate of 80% of the employee’s average salary for the six months prior to leave being taken.

In exceptional circumstances, sick leave can be extended up to 52 weeks upon ruling by the State Medical Commission.

Contractual provisions

Contract of Employment

Contracts of employment must be written and executed in Latvian or dual language.
The Latvian Labour Code recognises both temporary and indefinite contracts of employment.

Temporary contracts cannot exceed two years and are only accepted in specific circumstances.

Upon signing a contract, employers must register the employee in the local Electronic Declaration System (EDS) of the State Revenue Service within three days.

Prior to this, the employee must complete a mandatory medical examination and provide the employer with their Payroll Tax Book (ANG).

Probationary Period

Employers may choose to include a probationary period of up to a maximum of three months; this must be stated in the contract of employment.

Should the employee not pass the initial probationary period, extensions are not permissible and the employee must be informed of their termination at least three days prior to the end of the probation date.

Working Hours

A regular working week consists of 8 hours per day and 40 hours per week.

For any employment associated with special risk this is reduced to 35 hours per week.

An employee must not work more than 56 hours in one week, inclusive of overtime.

It is a legal requirement to record hours worked.


All overtime must be agreed in writing with employee’s consent. The maximum overtime is restricted to 8 hours per week and must not exceed 24 hours in succession or the 56-hour maximum.

All overtime hours must be paid at a minimum rate of 100% of the employee’s daily hourly rate.

Additional Leave

Employees are entitled to 18 months of childcare leave until their child reaches the age of eight. Time taken during childcare leave counts towards work service.


The Latvian Labour Code stipulates the terms of cause for termination by an employer. This includes circumstances related to the performance or conduct of an employee and economic and organisational measures related to the company.

It is advised that all terminations are discussed with TopSource Worldwide.

Notice period

Notice of termination must be provided in writing by both parties.

Dependent on the cause of termination, employers are required to give between ten days to one month’s notice.

Employees are required to give one month’s notice upon resignation.

Severance Pay

Employees are entitled to severance pay after five years of employment, equal to one month’s wages.

This is increased to remuneration of two months’ wages for any employment exceeding five years.

Holiday entitlement

Employees are entitled to a minimum of four weeks of paid leave each year; a minimum of two weeks of leave must be taken in an uninterrupted block, chosen by the employee.

The holiday year runs from the employee’s start date and leave may be requested following six months of continuous employment.

Employees may carry forward up to two weeks’ holiday per year; cash compensation is prohibited except in the case of termination.

Employ and pay anywhere

Specialising in multi-country payroll solutions

TopSource Worldwide offers comprehensive payroll outsourcing services, ensuring seamless and accurate management of your organisation's payroll functions. With cutting-edge technology and a team of experienced professionals, we handle payroll processing, tax compliance, and regulatory requirements with precision.

Calculate Your Employer of Record Taxes in Seconds

Employment Cost Calculator in Latvia

Our Employment Cost Calculator simplifies complex tax calculations for global businesses. Accurately assess tax obligations, ensuring compliance with local regulations. Streamline payroll management effortlessly with our user-friendly tool, providing transparency and efficiency in international workforce taxation.

In addition to calculating your EOR taxes, our calculator can also help you:

  • Understand the different types of EOR taxes
  • Stay up-to-date on the latest changes to EOR tax regulations
  • Avoid penalties for non-compliance
Our author

Mark Robbins

Global Sales Director

Mark is the Sales Director at Topsource Worldwide. He has been a pioneering figure in the global expansion space since 2013. He is the first salesperson to sell EOR services in Europe, a feat he accomplished in 2013. 

Published 2023-11-14 00:00:00

Updated 2023-11-15 00:00:00

Adrian Cooney

Reviewed by:

Adrian Cooney

Adrian Cooney

Fact checked by:

Adrian Cooney

Employer of Record FAQ

Frequently Asked Questions about Latvian employment solutions

What is an Employer of Record in Latvia?

An Employer of Record (EOR) is a professional services provider that assumes the responsibility of being the legal employer for a company's workforce in Latvia. This entails managing tasks such as payroll processing, tax withholding, benefits administration, and ensuring compliance with local labour laws and regulations.

How do global employment services work?

Global employment services operate as a comprehensive solution for businesses seeking to expand their workforce across borders. These services, often provided by Employer of Record (EOR) companies like TopSource Worldwide, streamline the complexities of international employment.

What are the benefits of working with an Employer of Record in Latvia?

Employer of Record companies assume the legal responsibilities associated with employment, alleviating the burden of compliance, payroll, and HR management in Latvia. This allows companies to expand globally without the complexities of establishing legal entities in each location.

What is the difference between EOR & PEO?

An EOR acts as the legal employer, handling tasks like payroll, tax compliance, and benefits administration. This allows companies to expand internationally without establishing legal entities. On the other hand, a PEO shares employer responsibilities with the client company, often co-employing workers.

How are employer payroll taxes calculated in Latvia?

Calculating employer payroll taxes involves understanding the various taxes associated with employing workers and complying with tax regulations in Latvia. Key components include federal and state income taxes, Social Security, Medicare, and unemployment taxes.

What global employment solutions does TopSource offer?

TopSource Worldwide facilitates hassle-free global expansion by acting as the legal employer, handling payroll, tax obligations, and HR responsibilities. With expertise in global entity management, TopSource assists businesses in navigating the intricacies of legal structures across borders.

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