Employment in Latvia is governed by the Labour Law, with sickness, maternity, paternity and parental benefits paid by the State Social Insurance Agency (VSAA) from state social insurance contributions. Here is what employers need to know about leave, pay, tax and ending employment.
The Labour Law sets minimum leave for all employees. The employer pays annual leave and the first days of sickness, while longer sickness and family leave are paid by the State Social Insurance Agency (VSAA).
At least 4 calendar weeks a year, not counting public holidays. One part must be at least 2 uninterrupted weeks. Employees under 18 get 1 month.
Day 1 is unpaid. The employer pays at least 75% of average earnings for days 2–3 and 80% for days 4–9. The VSAA pays 80% from day 10.
56 days before and 56 days after the birth (up to 140 days in some cases), with VSAA maternity benefit at 80% of average insured earnings.
Working days, to be taken within 6 months of the birth. Paid by the VSAA at 80% of average insured earnings.
Each parent can take parental leave until the child turns 8. Parents choose one of two parental benefit options from the VSAA:
| Option | Basic portion | Benefit |
|---|---|---|
| 13 months in total | 9 months, until the child turns 1 | 60% |
| 19 months in total | 15 months, until the child turns 1.5 | 43.75% |
Set up each Latvian leave type in IceHrm with its own accrual, carry forward and approval rules, including supplementary leave for parents and pro-rata entitlements. Employees see their live balance before they apply, and managers see who is away on a shared calendar. Leave management →
The national minimum monthly wage is set by the Cabinet of Ministers and applies to full-time employees working normal hours.
From 1 January 2026, for full-time work. Part-time employees are paid pro rata.
Usually worked Monday to Friday. Summarised working time can be used for shift work.
At least 100% on top of the normal rate for overtime and for work on a public holiday.
Overtime needs the employee’s written agreement, except in exceptional situations set out in the law. It cannot exceed 8 hours a week on average, calculated over a reference period of up to 4 months. Employees under 18 cannot work overtime.
Capture attendance and overtime in IceHrm, including work on public holidays, and feed the hours straight into payroll so supplements reflect what was actually worked. Time & attendance →
Latvia taxes personal income at progressive rates. Employers withhold personal income tax (IIN) from each salary payment and report it to the State Revenue Service (VID).
| Annual taxable income | Rate |
|---|---|
| Up to €105,300 | 25.5% |
| Over €105,300 | 33% |
In 2026 employees get a fixed non-taxable minimum of €550 a month and €250 a month for each dependant, applied by the employer that holds the employee’s electronic wage tax book.
State social insurance contributions (VSAOI) fund pensions, sickness, maternity, parental, unemployment and work injury benefits. They are shared between employer and employee and paid monthly to the VID.
Of gross salary, up to an annual cap of €105,300. Lower rates apply to employees who receive a state old-age pension.
Withheld from gross salary by the employer, up to the same cap.
A small fixed monthly fee per employee that funds the employee claims guarantee fund.
Income above the social insurance cap is subject to a solidarity tax instead of normal contributions, which is largely credited back against the employee’s income tax.
Build Latvian pay the way you already structure it, with your own salary components, deductions and formula columns, such as VSAOI employer and employee columns. Want to know how well IceHrm handles payroll calculations for Latvia? Contact us or see Payroll →
An employer can only give notice for one of the reasons listed in Section 101 of the Labour Law, such as serious breach of duty, lack of professional competence, health reasons, a reduction in staff or liquidation of the employer. Before dismissing for conduct-related reasons, the employer must ask the employee for a written explanation, and trade union consent may be needed for union members.
| Situation | Notice |
|---|---|
| Resignation by the employee | 1 month |
| Employer: illegal conduct, intoxication at work, or health reasons certified by a doctor | Without delay |
| Employer: serious breach of contract, immoral conduct, safety breaches or long-term incapacity | 10 days |
| Employer: lack of competence, reinstatement of a previous employee, staff reduction or liquidation | 1 month |
| Employer: some grounds, employee with a disability | 2 months |
Severance is due when employment ends for reasons not attributable to the employee, such as lack of competence, health reasons, long-term incapacity, reinstatement of a previous employee, staff reduction or liquidation.
| Service with the employer | Severance pay |
|---|---|
| Less than 5 years | 1 month |
| 5 to 10 years | 2 months |
| 10 to 20 years | 3 months |
| More than 20 years | 4 months |
Collective redundancies must be notified in advance to the State Employment Agency and employee representatives. Unused annual leave is paid out when employment ends.
Latvia’s public holidays are set by law. When 4 May or 18 November falls on a weekend, the next working day is a holiday. Working days before some holidays are shortened by 1 hour.
In years when the Latvian Song and Dance Festival is held, its closing day is also a public holiday. Work on a public holiday is paid with a supplement of at least 100%.
Leave groups give each office its own holiday calendar, including moved holidays and festival years, so leave requests and balances always count the right working days. Holiday calendars →
Employment contracts must be in writing and signed before work starts. Employers must register each new employee with the State Revenue Service no later than the day before they start work.
Probation cannot exceed 3 months, or up to 6 months if agreed in a collective agreement with a trade union. Shorter limits apply to fixed-term contracts of up to 1 year, and no probation is allowed for employees under 18. Fixed-term contracts are only allowed for the reasons listed in the law and cannot exceed 5 years in total, including extensions.
Send Latvian employment contracts for e-signing, store them on the employee’s record, and track VID registration and other onboarding steps with task lists. Documents & e-signing →
This guide is general information to help you plan HR processes, not legal, tax or financial advice. Employment law and rates change regularly and awards, enterprise agreements and state rules may give employees more than the minimums shown here. Always confirm current requirements with the official sources or a qualified adviser.
Configure leave types, accrual rules and public holidays for Latvia, keep employee records and contracts in one place, and run payroll with your own salary components. Want to know how IceHrm handles payroll calculations for Latvia? Talk to us.
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