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Latvia has 23.59% employer VSAOI, three-bracket income tax (20%/23%/31%), EUR 700/month minimum wage, and a growing Riga IT hub. Rippling handles VID, VSAA, and Latvian Labour Law compliance.
Latvia is a Baltic EU member state with a growing IT outsourcing, fintech, and shared services sector centered in Riga. Latvia benefits from EU membership, a multilingual workforce (Latvian, Russian, English), and competitive salaries relative to Western Europe. Latvia uses the Euro (EUR) and joined the Eurozone in 2014. Riga is a growing hub for technology companies seeking Baltic EU access.
| Contribution | Rate | Notes |
|---|---|---|
| VSAOI (employer) | 23.59% | Covers pension, disability, maternity, unemployment, accident insurance |
| Business risk duty | EUR 0.36/month | Per employee; flat amount |
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| Contribution | Rate | Notes |
|---|---|---|
| VSAOI (employee) | 10.5% | Pension, disability, maternity components |
| Income tax (IIN) | 20% / 23% / 31% | Three-bracket progressive system |
| Annual Income | Rate |
|---|---|
| Up to EUR 20,004 | 20% |
| EUR 20,005–78,100 | 23% |
| Above EUR 78,100 | 31% |
Non-taxable minimum (NTM) reduces taxable base for lower earners. Monthly IIN withholding by employer; remitted to VID by 17th of following month.
Notice: 10 calendar days (probation); 1 month (general). Severance: 1 month (up to 5 years); 2 months (5–10 years); 3 months (10+ years). Additional VSAA-funded severance benefit available. Collective redundancy notification to State Employment Agency (NVA) required.
Latvia has a three-bracket progressive income tax (IIN): 20% on income up to EUR 20,004/year; 23% on EUR 20,005–78,100/year; 31% on income above EUR 78,100/year. Employer withholds IIN monthly and remits to VID. Latvia also applies a non-taxable minimum (NTM) that reduces the taxable base for lower earners, calculated based on income level.
Latvia's minimum wage is EUR 700/month (2024), rising to EUR 740/month in 2025. Latvia has been increasing its minimum wage as part of EU convergence and government policy to reduce inequality. For tech and professional roles, market salaries are substantially above the minimum.
Latvia, particularly Riga, is a growing hub for IT outsourcing, shared services, and fintech. Major employers in Latvia include Accenture, EPAM, Citadele Bank, and Latvian fintech companies. Latvia benefits from EU membership, strong Russian and English language skills (useful for CIS market access), and competitive salaries relative to Western Europe.
VSAOI (Valsts sociālās apdrošināšanas obligatās iemaksas) is Latvia's mandatory state social insurance contribution system. Total rate: 34.09% (employer 23.59% + employee 10.5%). VSAOI covers pension, disability, maternity, unemployment, work accident, and burial insurance. Both employer and employee contributions are calculated on gross salary with no ceiling for most branches.
