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CalculatorsRates: 2026 and 2027

What an employee really costs

Gross salary is not the cost. On top of it sit the employer's social contributions of 23.59%, and only that total is what an employee actually costs you. Calculate it both ways: from salary to cost, or from budget to salary.

Employer's contributions
23.59%
Annual contribution ceiling
105,300 EUR
Risk duty per month
0.36 EUR
Calculation

What do you know?

What do you know?
5003000+
Year

For an employer both years are identical: contribution rates and the ceiling do not change. Only the employee's take-home pay differs.

Full cost per month2027 · EUR

1853,85

Over a year that is 22 246,20 EUR in full cost.

Gross salary
1500,00
Employer's social contributions 23.59%
353,85
Total cost to you
1853,85

Out of that

Employee takes home
1145,51
Taxes and contributions
708,34

Of every euro you spend, the employee receives 61,8 cents.

Take-home pay is the standard case: payroll book applied, no dependants. Those change the employee's net pay but never your cost. There is also the business risk state duty, in 2026 0,36 EUR per employee per month.

Minimum wage

If you pay the minimum wage, plan for 820 euros

Tax rates do not change in 2027, so for an employer everything stays as it is, except the minimum wage. On 8 October the tripartite council backed 820 euros rather than the 835 the formula would give, and the Cabinet still has to adopt it. If you pay the minimum wage, that is the only thing that changes your costs.

ScenarioGrossCosts youDifference per year
Today, 2026780,00964,00baseline
2027, backed820,001013,44+593,23
2027, formula (not followed)835,001031,98+815,69

Per employee. With five minimum-wage employees the yearly difference is 2966,16 or 4078,47 EUR respectively.

Questions

Frequently asked questions

What does an employee on a 1000 EUR gross salary cost in Latvia?

1235.90 EUR a month. On top of the gross salary the employer pays state social insurance contributions of 23.59%, which on 1000 EUR is 235.90 EUR. The employee's own deductions, their 10.50% social contributions and income tax, come out of that same 1000 EUR and do not increase what the employer pays.

Which taxes does an employer pay for an employee in Latvia?

The employer's own payment is a single one: state social insurance contributions of 23.59% of the whole gross salary. The contribution ceiling of 105,300 EUR a year does not stop the payment: VSAA records contributions on the excess as solidarity tax. Beyond that the employer withholds the employee's 10.50% contributions and their income tax from the salary and forwards them, but that money is part of the employee's pay rather than an extra cost. There is also the business risk state duty, 0.36 EUR per employee per month in 2026 and 2027.

Will the 2027 tax changes increase employer costs?

No. Social contribution rates, the contribution ceiling and income tax rates do not change in 2027, so an employee on the same gross salary will cost exactly what they cost in 2026. The only change is the tax-free allowance rising from 550 to 570 EUR, and that goes entirely to the employee as 5.10 EUR more take-home pay per month rather than reducing the employer's cost.

What will a minimum-wage employee cost in 2027?

At today's 780 EUR minimum wage an employee costs 964 EUR a month. For 2027 the National Tripartite Cooperation Council backed an 820 EUR minimum wage on 8 October. The cost then becomes 1013.44 EUR, which is 49.44 EUR more per month and 593.23 EUR more per year. The Cabinet still has to adopt the figure, normally in November. The formula's 835 EUR would have cost 1031.98 EUR a month, but it was not backed.

What salary can I offer on a given budget?

Enter your total monthly budget for one employee and the calculator shows the gross salary that fits inside it and what the employee will take home. The calculation is exact rather than approximate: gross salary is the budget divided by 1.2359, at any salary.

How much of each euro an employer spends reaches the employee?

On a 1500 EUR gross salary in 2027 the employer spends 1853.85 EUR and the employee takes home 1145.51 EUR, so roughly 62 cents in every euro. The rest is social contributions and income tax. At lower salaries the employee's share is larger, because the tax-free allowance covers more of the pay.

Is a self-employed contractor cheaper than an employee?

Often yes, but it is not a free choice. If the working relationship has a permanent character, meaning set hours, the employer's instructions, a workplace and the employer's equipment, the State Revenue Service can reclassify it as employment and assess the taxes owed plus penalties and late-payment interest. Working with a self-employed contractor is lawful when it genuinely is an independent service rather than employment under another name.
More

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The same calculation from the employee's side.

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Both options side by side at equal cost.

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