Global coverage
Available in +150 countries
Employer costs, taxes, minimum wage and leave rules for hiring here, plus the faster route: hire a contractor with Ontop, no local entity needed.
2026
Currency
EUR € (Euro)
Employer contributions
~23.59% employer SS (pension 10% + disability/sickness/maternity/unemployment 13.59%)
Minimum wage
€740 EUR (2026)
Payment frequency
Monthly
Calendar year (Jan 1 - Dec 31)
Capital
Riga
Timezone
EET (GMT+2)
Employee or contractor
If the work is project-based or you need to move fast, a contractor gets you the same talent with a fraction of the paperwork.
Employee
~€2,719 EUR total
/month
For a gross salary of
€2,200 EUR gross/month
Setup
Local entity or employer of record, plus tax and social security registration
Employer contributions
~23.59% employer SS (pension 10% + disability/sickness/maternity/unemployment 13.59%)
Mandatory extras
Annual Bonus
Monthly admin
Monthly payroll / EDS by 17th / VSAA + VID contributions
Contractor with Ontop
No local entity
$49
/contractor/month
The agreed rate, plus Ontop from $49 per contractor per month.
Sign a contract, yours or an Ontop template. No local registration on your side.
No employer contributions: the contractor handles their own taxes and social security.
One payment per invoice, in one payroll run.
Paid into their Ontop Global Account in USD.
See the full side-by-side comparison
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A contractor's rate usually covers their own taxes, so compare total cost, not just gross pay. Run your numbers in the contractor vs employee calculator.
Hiring here: the full breakdown
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Payroll guide
Employer costs come on top of gross pay. Use these figures to budget a hire and to compare it with a contractor rate.
Total monthly cost
~€2,719 EUR total
Example gross salary
€2,200 EUR gross/month
~€1,530 EUR net
Net pay to the employee
Tax and employee contributions
Withheld from gross pay
~€519 EUR employer SS
Employer contributions on that salary
Employer contributions
~23.59% employer SS (pension 10% + disability/sickness/maternity/unemployment 13.59%)
Employee contributions
~10.5% employee SS + income tax
Total cost above gross
~23.59% above gross
Figures are estimates for planning. Rates change with each budget and can vary by sector, so confirm them before you make an offer.
What people earn here, from the legal floor to the main cities, plus the extra pay most employers budget for.
National average
~€1,600 EUR
Per month
Riga
€1,800 - €3,200 EUR
~30%
Daugavpils
€1,200 - €1,900 EUR
~8%
Monthly gross. National average salary per year:
~€19,200 EUR
Minimum wage
€740 EUR (2026)
Paid:
Monthly
Extra pay
Annual Bonus
Discretionary
December
Collective agreements can set sector minimums above the national one. Check whether one applies to the role before you set the salary. Next step: estimate the full cost of an employee.
Who collects what, how often, and what happens when a payment is late.
Income tax brackets
20% up to €20,004 / 23% / 31% above €78,100
Tax year:
Calendar year (Jan 1 - Dec 31)
Filing calendar
Monthly by 17th (alga.lv / EDS)
Social security payments
April 1 (annual declaration via EDS)
Income tax
End of January
Employee tax certificate
Izziņa par ienākumiem
April 1
Annual return
Gada ienākumu deklarācija
Late payment penalties
Late SS: 0.05%/day; late income tax: 0.05%/day + VID audit risk
Who collects what
VID
Income and SS tax
VSAA
Social insurance
Valsts darba inspekcija (VDI)
Labor law inspection
The time off and paid leave every employee is entitled to by law. Budget for it when you compare an employee with a contractor.
Annual leave
Ikgadējais atvaļinājums
20 working days (4 calendar weeks)
Public holidays
12 public holidays
Sick leave
Slimības lapa
Employer: day 1-2 at 75%; VSAA: day 3-10 at 75%; VSAA: day 11+ at 80%
Maternity leave
16 weeks
80% VSAA (capped)
The contracts you can use, and what ending an employment relationship costs.
Permanent
Beztermiņa darba līgums
Fixed term
Terminēts darba līgums
Independent contractor
Saimnieciskās darbības veicējs (pašnodarbinātais)
Collective agreements
Koplīgums
Ending employment
Atlaišanas pabalsts
How it is calculated
1 month minimum
Calling someone a contractor does not make them one. If the role works like employment in practice, local authorities can reclassify it, with back contributions and penalties.
The errors that most often trigger back payments and penalties here, and what to do instead.
Envelope Wages (Aplokšņu algas)
Risk Level: HIGH
Latvia has significant undeclared wage payment issues. VID uses bank account monitoring and employee tip-offs to identify gap between declared wages and actual payments. Employers face fines plus full SS and tax recalculation.
Part-Time SS Contribution Errors
Risk Level: MEDIUM
Latvian VSAA requires SS contributions on all employment income including part-time. Employers sometimes fail to register part-time workers or contribute only on full-time equivalent. VSAA audits generate retroactive contribution demands.
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Next topicOntop is the Global Workforce Engine for contractor teams: contracts, compliance documents and payments in 150+ countries.
150+
countries
$49
per contractor per month
1 run
to pay your whole team
USD
Global Account for every contractor
FAQ
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Ontop works with contractors, not employees. As Contractor of Record, Ontop handles contracts, compliance documents and payments for contractors in 150+ countries. To employ someone, you need a local entity or an employer of record. Ontop doesn't act as your employer of record.
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Employers pay contributions on top of gross salary. The cost table on this page shows the rates that apply here and a worked monthly example. A contractor with Ontop costs the agreed rate plus Ontop from $49 per contractor per month.
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Many countries require an extra month or an annual bonus for employees. The salaries section on this page shows the one that applies here and when it is usually paid. Contractors are paid what you agree in the contract.
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Employers withhold income tax and the employee's social security share every pay run, then pay them to the local authorities. The taxes section on this page lists the brackets, rates and filing deadlines that apply here.
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Yes. The contractor vs employee calculator compares the full cost of an employee, employer contributions included, with a contractor rate plus Ontop's monthly fee.
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When the work is project-based, you need to start fast or you don't have a local entity. If the person will work fixed hours, under your direction and only for you, local law may treat them as an employee, so hire them as one.
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Misclassifying employees as contractors, missing tax and social security deadlines, and ignoring collective agreements that set higher wage floors. The mistakes section on this page covers the ones that come up most often here.
Compare employer costs, taxes and contractor rules in nearby countries:
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.