Build a global team in minutes
Get expert helpLatvia's on your radar, and for good reason. You've heard about the rising tech scene, the multilingual workforce, and the country's pro-business tax setup. The startup energy is real and the talent pool is deep.
But once you start digging into how to actually hire someone there, things get complicated. Employment contracts need specific language, payroll has its own rules, and that's not even taking into account the social contributions.
This guide breaks it all down so you can hire and pay employees in Latvia with confidence.
Understanding hiring pathways in Latvia
When it comes to bringing on talent in Latvia, you've got three main options: hire directly, go through an Employer of Record (EOR), or work with independent contractors.
Here's a quick look at how they compare:
Direct Employment
Direct employment gives you full control over your team in Latvia and helps you establish a long-term local presence. You can shape culture, manage performance directly, and integrate employees deeply into your operations.
This approach does require setting up a legal entity in Latvia and managing payroll, taxes, and compliance yourself. It also adds administrative workload and ongoing regulatory responsibilities.
This option is best for companies planning a long-term investment in Latvia and wanting to build an in-house team with strong oversight and integration.
Employer of Record
Using an EOR removes the need to establish a local entity. The EOR handles employment compliance, payroll, and legal obligations on your behalf, simplifying international hiring significantly.
The downside is that you'll have slightly less direct control over talent since the EOR is the official employer.
This route is best for businesses looking for quick expansion into Latvia or those wanting to reduce risk and admin while testing the market.
Contractors
Hiring contractors allows for fast, flexible engagement. It's ideal when you need specific skills quickly or want to scale up and down without long-term commitments.
There are misclassification risks if the working relationship resembles employment, and you'll have the least oversight with this route. Contractors may also juggle multiple clients, meaning you might not be top priority.
This route is usually best for project-based work where flexibility and specialized skills are needed.
If you're just getting started in Latvia-or scaling fast-an employer of record is usually the best option.
What you need to know about Latvian labor laws
Hiring in Latvia isn't hard, but it is specific. You'll need to follow the rules set out in the Labour Law of the Republic of Latvia. Here's the short version:
- You must have a written employment contract in place before day one
- All new hires must be registered with the State Revenue Service (SRS)
- Job descriptions and pay slips are mandatory
- Non-EU workers need a valid work permit
Latvia doesn't leave a lot of room for "we'll figure it out later." Get it right from the start or you could face audits and fines.
How to stay compliant when hiring in Latvia
Let's walk through what hiring in Latvia actually looks like-from the first draft of a contract to onboarding day.
Write the contract
In Latvia, contracts can be fixed-term or indefinite. Either way, they must be signed before your employee's first day.
Include these basics:
- Job title and role description
- Salary and how often it's paid
- Working hours and location
- Probation period (optional, but common)
- How either side can end the contract
Register your hire with the SRS
If you're hiring directly, this is non-negotiable. You'll need to register your company and your new employee with the State Revenue Service before the first paycheck goes out.
Understand notice and termination
Probation typically lasts up to 3 months. During this time, either side can walk away with 3 days' notice. After that, notice periods stretch from 10 to 30 calendar days, depending on how long the person's been with you. And yes, you'll need to document everything.
Onboard the right way
New hires should get:
- A written overview of their role and conditions
- Company rules and policies
- Safety training (if needed for the role)
How payroll works in Latvia
This is where precision matters. Latvia's payroll system is structured, and there's not a lot of wiggle room. If you don't file or remit correctly, you're looking at penalties.
Taxes and social contributions
Latvia uses a PAYE (pay-as-you-earn) model. You'll need to withhold:
- 20% personal income tax on earnings up to €20,004/year, 23% above that
- 10.5% from the employee for social insurance
- 23.59% employer-side social insurance contribution
- A solidarity tax for high earners
Reports and payments are due to the SRS by the 23rd of the following month. You can find full details on current tax rates on PwC's Latvia tax summary.
How and when to pay
Salaries are paid monthly, usually via SEPA bank transfer. Best practice is to pay on the 25th or the last working day of the month.
Payslips should include:
- Gross salary and deductions
- Net salary
- All taxes and contributions paid
Late payments (even by a day) can trigger penalties, so build in buffer time.
What compensation and benefits look like in Latvia
To attract strong candidates, you'll want to go beyond the basics. But let's start with what's required.
Minimum wage and average pay
As of 2025, Latvia's national minimum wage is €700/month (US$817). But skilled professionals earn significantly more:
- Software engineers: €2,500-€4,000/month (US$2,915-$4,665)
- Marketing managers: €2,000-€3,200/month (US$2,330-$3,730)
- Finance analysts: €1,800-€2,800/month (US$2,100-$3,270)
You can model take-home pay using Latvian salary calculators.
Statutory benefits
You're required to offer:
- Four weeks of paid vacation (minimum)
- Paid sick leave (employer covers the first part)
- 112 days of maternity leave
- Up to 1.5 years of parental leave with state support
Extras like private health coverage or meal stipends are common, especially for competitive roles.
Streamline the hiring process with an employer of record
Getting compliant is one thing. Staying compliant is another. If you're not ready to manage every detail in-house, there's a smarter way to go global.
What an EOR does
An EOR acts as the legal employer in Latvia, while you manage the day-to-day work. They handle:
- Drafting and executing local employment contracts
- Paying salaries and submitting taxes to the SRS
- Administering benefits and handling termination procedures
Bonus tip: Stay updated by at the State Revenue Service and the Ministry of Welfare. Labor laws change often, and these two sources will keep you in the loop.
Latvia hiring and payroll FAQ
How do I pay employees in Latvia?
Use monthly SEPA bank transfers. Payslips must clearly break down earnings and deductions.
What's the average salary in Latvia?
Roughly €1,500/month (US$1,745). This is higher in tech and finance roles.
Can I hire foreign workers?
Yes. EU citizens don't need permits. Non-EU citizens need work and residence permits. See our guide on Latvia work visas and legal hiring for the full process.
What mistakes do employers make?
Missing tax deadlines, misclassifying contractors, or skipping written contracts. It adds up fast.
How Pebl helps hire in Latvia
There's a lot to love about Latvia, but getting started can feel like an uphill struggle.
Pebl makes it easy.
With our global employer of record services, you get fully compliant hiring in Latvia and 185+ countries worldwide. That means accurate payroll, benefits management, and localized contracts all without opening a separate legal entity. You get your talent in days, not months and save a lot of money too.
We handle the complexity so you can focus on growth. Whether it's your first hire or your fiftieth, we'll make sure you're covered every step of the way. Contact us to learn more.
Disclaimer: This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided "as is," and no representations are made that the content is error-free.
© 2025 Pebl, LLC. All rights reserved.
