Employer of Record in Latvia

Employ talent in Latvia without a local entity — VSAOI social contributions, personal income tax, the solidarity tax and EUR payroll handled by local specialists.

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Why hire in Latvia through an EOR

Latvia is a cost-effective, EU-member Baltic market with a straightforward tax system: employer VSAOI social contributions of 23.59%, a flat-ish personal income tax, and a clear EUR 780 minimum wage. The nuances sit in the minimum social-contribution base and the solidarity tax on high earners. Through an EOR, all of it is already running.

No entity required

Employ staff in Latvia, and 180+ other countries, without registering a Latvian SIA or maintaining a local presence.

VSAOI, calculated correctly

Employers pay 23.59% VSAOI social contributions on gross salary. We calculate and remit it monthly to the State Revenue Service (SRS), alongside the small business-risk duty.

Gross-to-net handled

We deduct the employee’s 10.5% VSAOI and 25.5% personal income tax, apply the EUR 550 non-taxable minimum and dependant relief, and report correctly — so net pay is always right.

Solidarity tax managed

For high earners, a solidarity tax applies above the annual VSAOI ceiling (EUR 105,300). We apply it automatically so nothing is missed.

Working in days, not months

We register the employment before day one — your hire can be working in Latvia in days, while an entity setup would still be weeks away.

Hire in Latvia without setting up an entity

Latvia is one of the EU’s most cost-effective hiring markets: an English-proficient, technically strong Baltic workforce, a euro economy, and a transparent tax system. Employer social contributions (VSAOI) are 23.59% of gross salary, personal income tax is 25.5% up to a high threshold, and the minimum wage is EUR 780 a month from January 2026. The details that catch foreign employers are the minimum mandatory social-contribution base (which applies even to low earners), the EUR 550 monthly non-taxable minimum, and the solidarity tax on high incomes.

An Employer of Record removes the setup and the arithmetic: TopSource employs your Latvian hires with VSAOI calculated and remitted, gross-to-net handled including the non-taxable minimum and dependant relief, and the solidarity tax applied where it bites. Hire into the Baltics fast and compliantly.

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Calculate Your Employee Costs in Latvia

Enter a gross salary to see the full monthly cost of a hire in Latvia — 23.59% employer VSAOI and the employee’s gross-to-net in one view.

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*Indicative figures only and not definitive legal advice. Local regulations change frequently. Consult an expert

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How EOR in Latvia works: the process through TopSource

Step 1

Confirm the role and structure

We agree the position, salary and benefits with you, confirm the applicable non-taxable minimum and dependant relief, and check whether the hire is an EU national or needs a work permit.

Step 2

Issue a compliant contract

Your new hire receives a written employment contract in Latvian under the Labour Law, with probation, notice, leave and VSAOI details clearly set out.

Step 3

Register the employment

We register the employee with the State Revenue Service (SRS) before work begins — a strict pre-employment requirement in Latvia.

Step 4

Run payroll in EUR

We calculate salary, 23.59% employer VSAOI plus the business-risk duty, deduct the employee’s 10.5% VSAOI and 25.5% PIT, apply the non-taxable minimum, and file monthly.

Step 5

Support the relationship day to day

Your account manager and the employee both have a direct line for contract questions, leave, non-taxable minimum queries and anything else that comes up.

Know your Latvia hiring costs before you commit

Tell us the role and salary — we’ll send back the full Latvian employment cost, VSAOI and gross-to-net included, within one business day.

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Employer Costs in Latvia at a Glance

23.59 %

Employer VSAOI social contribution on gross salary

€ 780

Monthly minimum wage from 1 January 2026

20

Minimum statutory annual leave days

Employer Costs in Latvia Explained

Latvia keeps employer costs moderate and predictable. Employers contribute 23.59% of gross salary in state social insurance (VSAOI), plus a small fixed business-risk duty, while employees pay 10.5% VSAOI and 25.5% personal income tax (33% above EUR 105,300/year), both withheld at source. The minimum wage is EUR 780 per month from January 2026, and the non-taxable minimum is EUR 550. As a planning rule, total employer cost runs around 1.35 times gross. Here’s the breakdown.

The main employer cost is state social insurance (VSAOI) at 23.59% of gross salary, funding pensions, unemployment, workplace-accident and maternity/paternity benefits — paid entirely by the employer on top of gross. On top sits the fixed business-risk state duty, EUR 0.36 per employee per month in 2026, which funds compensation if an employer becomes insolvent. A minimum mandatory contribution base applies: contributions are assessed on at least the equivalent of the minimum wage even where actual pay is lower (with limited exceptions), so part-time and low-hour roles carry a contribution floor. As a working rule, budget total employer cost at roughly 1.35 times gross salary once VSAOI and vacation accrual are counted.

On the employee side, 10.5% VSAOI and 25.5% personal income tax (IIN) are withheld at source. The non-taxable minimum is a fixed EUR 550 per month in 2026 (applied at one workplace only, usually the main job), and dependant relief of EUR 250 per month per dependant further reduces the taxable base. VSAOI is deducted before income tax is calculated, so the two interact. The flat 25.5% rate (rising to 33% above EUR 105,300 a year, with a further 3% surcharge on total annual income above EUR 200,000) keeps net-pay calculations predictable, which candidates appreciate.

Income above the annual VSAOI ceiling of EUR 105,300 is not subject to further social contributions, but it is subject to the solidarity tax. During the year it is withheld at the same headline rates as VSAOI (23.59% employer / 10.5% employee), but the effective rate is 25%, and the employer is refunded the difference in the following year. This means very high salaries are not contribution-free above the cap, and long-term cost models for senior hires should account for it. We apply it automatically where it bites.

Statutory annual leave is a minimum of 20 working days (four weeks), and employees are entitled to paid public holidays on top. The minimum wage is EUR 780 per month from January 2026. Employment is governed by the Labour Law, which requires written contracts in Latvian, sets notice periods, and regulates termination — dismissal needs valid grounds and process. Sick leave requires employer payment for a defined initial period before the state takes over. We apply all of it correctly within payroll.

EOR or entity setup: which one fits your Latvia plan?

Registering a Latvian SIA is inexpensive, but it creates SRS registration, monthly filings, Latvian-language documentation and a formal dismissal regime that don’t disappear when plans change. An EOR makes sense while you’re testing the market or building a first team; your own entity usually makes sense once Latvian headcount and permanence are certain.

Consider an EOR if you’re:

Hiring your first one to five people in Latvia
Testing the Latvian or wider Baltic market before committing to a company
Hiring technical or shared-services staff fast, without waiting on registrations
Working to a hiring deadline measured in weeks, not months

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The Freedom Monument seen from above over central Riga at sunrise, Latvia

Why TopSource for Employing in Latvia

TopSource for Employer of Record, global payroll or any other of our services represent a simpler, more reliable and transparent option.

We don’t hide fees or sneak price increases. We don’t lock you in for employees you don’t use. But we do give you a dedicated point of contact, available on the phone so you get answers fast — including on the questions Latvia raises, from the minimum contribution base to the non-taxable minimum and the solidarity tax. We blend HR advisory with in-market expertise, and we stay flexible around the needs of your business.

EOR Services Latvia Payroll

The Latvian flag flying against a blue sky with clouds, Latvia

“Their expertise and understanding of the unique hiring, payment, and human resource practices in each country has been nothing short of outstanding. Our Client Success Manager, has done just that … ensured our success. Her availability and willingness to engage on a personal level has made all the difference.”

Director of Research Operations,

“Excellent service, especially from our account manager who has gone above and beyond to help us use the platform effectively. Our manager, significantly simplifies my workload. It is like having your own TopSource HR representative on your team.”

Chief Human Resources Officer,

“TopSource has been our go-to resource for international hiring. They are responsive, thorough, respectful and knowledgeable. The Client Success team has provided us with the utmost customer service, and the more we use TopSource, the more, it gives us access to more resources and knowledge.”

Senior Manager, Human Resources ,

More than an Employer of Record.

Employer of Record services are only one way that we help you accelerate your global growth goals. From talent advisory to entity management, we give you the tools you need to research, enter and expand into your key markets.

Market Selection Advisory

Compare available talent, compensation, additional costs and regulations across different countries

Salary Benchmarking

Identify and prioritize markets for growth based on talent, cost & regulations

Global Skills Analysis

Map skill availability by region to align talent strategies with business goals..

Talent Acquisition

Find, hire & onboard the highly skilled team members you need in each locality.

Talent Strategy Optimization

Optimize your talent strategy to enable your organization to achieve it’s global ambitions.

Global Benefits Review

Benchmark your global benefits to boost employee retention.

Frequently
asked questions

Budget roughly 1.35 times gross salary. The employer pays 23.59% VSAOI state social insurance on top of gross, plus the fixed business-risk state duty of EUR 0.36 per employee per month, and vacation accrual makes up the rest. The employee’s 10.5% VSAOI and 25.5% personal income tax come out of gross, not on top. We quote the exact all-in figure per hire before you commit.

VSAOI is Latvia’s state social insurance, funding pensions, unemployment, workplace-accident and maternity/paternity benefits. It is split: the employer pays 23.59% of gross salary on top, and the employee pays 10.5% withheld from gross. A minimum mandatory contribution base applies, so contributions are assessed on at least the equivalent of the minimum wage even where actual pay is lower — which matters for part-time and low-hour roles. We calculate and remit it monthly to the State Revenue Service (SRS).

Personal income tax is withheld at 25.5%, but not on the full salary. A non-taxable minimum of EUR 550 per month applies in 2026, and it can only be used at one workplace — normally the employee’s main job. Dependant relief of a further EUR 250 per month per dependant reduces the taxable base on top of that. VSAOI is deducted before income tax is calculated, so the two interact. We apply the correct reliefs so net pay is right first time.

Income above the annual VSAOI ceiling of EUR 105,300 stops attracting further social contributions, but it does attract the solidarity tax. It is withheld during the year at the same headline rates as VSAOI (23.59% employer / 10.5% employee), but the effective rate is 25% and the employer is refunded the difference the following year. In practice it means senior and high-earning hires are not contribution-free above the cap, so it belongs in any long-term cost model. We apply it automatically where it bites.

Registering a Latvian SIA is inexpensive, but it brings SRS registration, monthly filings, Latvian-language documentation and a formal dismissal regime that stay with you even if plans change. An EOR fits while you are testing the Baltic market or building a first team — your hire can be working in days rather than the weeks an entity takes. Your own entity usually makes sense once Latvian headcount and permanence are certain, and we transfer the team when you get there.