Payroll and Benefits Guide - Latvia

Latvia
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Currency

Euro (EUR)
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Capital

Riga
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Employer Taxes

20.77% – 23.59%
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Date Format

dd/mm/yyyy
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Fiscal Year

1 Jan – 31 Dec

Fun Facts

The Latvian language is one of the oldest and most distinct Indo-European languages still spoken today.

Latvia is home to numerous beautiful castles and palaces, including Rundāle Palace, a stunning Baroque palace.

Riga, the capital and largest city of Latvia, is known for its well-preserved medieval Old Town.

Latvia is known for its beautiful white sandy beaches along the Baltic Sea coastline.

Latvians have a deep love for nature and forests.

Latvians have a strong tradition of sauna culture.

Latvia

Contributions

Employee Payroll Tax

Contribution TypeRate
National Social Insurance and Solidarity Tax10.50%
National Social Insurance and Solidarity Tax9.25%

Employer Payroll Tax

Contribution TypeRate
National Social Insurance and Solidarity Tax23.59%
National Social Insurance and Solidarity Tax20.77%

Payroll

Payroll Cycle

Payroll in Latvia typically occurs once every month. However, unless the employee and employer have agreed to payment once a month, the employer must make payment at least twice per month.

13th Salary

The payment of a 13th salary is not mandated by law.

Work Hours and Week

In Latvia, a typical workweek is made up of 8 hours per day and 40 hours overall.

Overtime

Any work performed outside regular business hours or on a holiday is regarded as overtime, and any such labor must first be mutually agreed upon. 200% of the standard salary rate of pay is paid for overtime hours.
Latvia

Leave

Paid Time Off

If an employee has worked for their employer for at least six months in a row, they are eligible for yearly leave. Such leave cannot be taken for fewer than 20 days (four full weeks), excluding weekends and holidays. Employees under the age of 18 are entitled to one month of annual paid leave.

Annual paid leave for the current year may be divided up with the consent of both the employee and the employer, but no part of the leave may be used for less than two consecutive calendar weeks. Only up to two weeks of unused leave may be carried over into the following calendar year with written consent.

Public Holidays

With the exception of Army Day, which is moved to a Friday or Monday when it falls on a Sunday, public holidays that fall on the weekend are typically lost.

Immediately before a holiday, the working day is shortened by one hour.

Sick Days

A sick day’s first day is not compensated.

Day two and day three are paid at 75% of the regular rate, while days four through ten are paid at 80%.

Sick pay benefits begin to be paid by the state on day 11.

Maternity Leave

For 56 or 70 calendar days of maternity leave, the first portion is compensated. Employees who have been medically diagnosed as pregnant up until the 12th week of pregnancy will get benefits for 70 calendar days. After the kid is born, 56 or 70 calendar days later, the second portion of the benefits is paid. If the employee had health issues during pregnancy, childbirth, the postpartum period, or had two or more children, benefits for 70 calendar days would be provided.

The maximum number of calendar days for which maternity benefits may be collected is 140.

Paternity Leave

The father of a kid under the age of three is given paternity benefits, as well as one of the two adoptive parents.

Parental Leave

The overall length of the parental benefit for children born on or after January 1, 2023 will be determined in months starting from the child’s birth date. The basic and non-transferable portions of the parental benefit will make up the entire time. Two months for each parent will be the non-transferable portion. The choice will be up to the parents.

To be eligible for the full benefit for the 13 months following the child’s birth:

  • Until the kid becomes one year old, only one parent may use the standard 9-month amount. The maternity allowance period is also included in this nine-month span.
  • The mother may use the two-month non-transferable portion up until the kid becomes eight years old.
  • The two-month non-transferable portion is available to the father up until the child becomes eight years old.
  • The parental allowance is equal to 60% of the claimant’s average contributing earnings for a period of 13 months.

Or

To earn the full benefit for the 19-month period beginning on the day the kid was born:

  • Until the kid is one and a half years old, one parent must utilize the normal 15-month allowance. The maternity allowance period is also included in this 15-month span.
  • The two-month non-transferable portion is available to the mother up until the kid becomes eight years old.
  • The two-month non-transferable portion is available to the father up until the child becomes eight years old.
  • The parental allowance is equal to 43.75% of the claimant’s average contributing earnings for a period of 19 months.

Termination

Termination Process

A fixed-term contract may be terminated by the employer for any of the following reasons: business, personal, or employee misbehavior. It necessitates notification and a justification for the termination in writing. If the cause is misbehavior, the employee must be warned and given the chance to defend their actions.

Notice Period

The minimum statutory notice time is one month. Notice is given with three days’ written notice during the probationary term.

Severance Pay

Statutory severance compensation in Latvia is based on service time:

  • For workers with up to 5 years of experience, one month’s salary
  • For workers with between five and ten years of experience, two months’ pay
  • For workers with 10 to 20 years of experience, three months’ pay
  • For workers with over 20 years of experience, four months’ pay

Probation Period

Probation Period

Probationary leave is normally up to three months under an indeterminate work contract. However, parties to a collective agreement may agree to a probationary term lasting longer than three months but no longer than six months without compromising the overall degree of employee protection.

It is possible to offer a probationary period during a fixed-term contract of:

  • For employment agreements lasting up to 6 months, up to 1 (one) month
  • For work contracts lasting up to 2 (two) months, up to 1 (one) year

Immigration

Employers of foreign citizens have a wide range of alternatives under Latvian law. Both the European Union (EU) and the Schengen Area include Latvia as a member. Depending on the kind of visa, there are different requirements, processing timeframes, job restrictions, and advantages for accompanying family members.

Unless they are nationals of countries not requiring visas, business travelers to Latvia usually utilize a regional Schengen C Visa. Within 180 days, the Schengen Area only permits stays of 90 days.

The primary types of work authorization are accessible to many international employees and include the Residence Permit with Work authorization.

High-skilled local hires who earn a certain income level are eligible for the EU Blue Card. For intracompany transfers of managers, experts, or trainees from outside the EU, the (EU) Intracompany Transferee (ICT) Permit is provided.

An in-country application with the Office of Migration and Citizenship Affairs (OCMA) is always required as part of the application procedure. Foreign people have the option of applying for either a visa or a residence permit if their expected stay is less than 90 days.

VAT

The commonly used standard rate of VAT in Latvia is 21.00%