Latvia is one of the least populous countries in the world with a population of about 1.92 million. The top income-generating areas for its economy are metals, wood products, and service industries. This Baltic state has a strategic cultural and geographical position, which allows it to have quick accessibility to huge markets for business operations. Also, thanks to its free-trade principles and advanced transport infrastructure, the country has continued to conduct successful trade for years. All these provide a variety of opportunities for those looking to join Latvia’s job market. But before relocating, get informed about the salaries offered in this country. Keep in mind that the currency being used in Latvia is the Euro (£) from the previous Latvian Lats (LVL). £1= $1.10
What is the average salary in Latvia in 2020? Latvia offers an average salary of about $10.98 an hour, $2,004.7/month, or $24,059.60 a year. These figures are inclusive of housing, transport, and other benefits, which brings the take-home pay (after taxes) to an average of $827/month. This is just a guide; the exact pay varies between professions, location, company, skills, and academic qualifications.
Most of the state-owned companies have been privatised, leaving only the large state companies that are politically sensitive. Foreign investment is very popular in the country due to the low costs of labour and free trade principles. In the labour market, the country’s capital pays the highest wages while Latgale has the lowest wages. The economy is slightly dependent on the Russian economy since 100% of its natural gas is imported from Russia. Otherwise, Latvia is a peaceful location that’s suitable for settlement and career advancement. Relocating to a foreign country is as exciting as it is challenging. That’s why I’ve created a guide that covers everything you need to know about living and working in Latvia to help ensure a smooth transition for you. Read on for more information:
Average Salary in Latvia
As I mentioned earlier, salaries vary between professions, which is why it’s important to check out the average salaries of specific jobs to know if they can afford you a decent lifestyle. Below are some of the monthly salaries for common job titles in Latvia;
- Information Technology Director $3,195.74
- Journalist $2,049.52
- Nurse $1,637.11
- Pilot $2,396.04
- Photographer $1,317.20
- Pharmacist $2,347.43
- Hotel Manager $3,125.21
- Teacher $1,497.53
- Police Officer $1,640.22
- Internal Auditor $2,167.10
- Human Resource Manager $2,711.23
- Engineer $1,922.46
- Graphic Designer $1,431.65
- Waitress/waiter $1,168.22
- Cashier $1,136.85
- Secretary $1,038.54
- Architect $1.829.94
- Attorney $2,882.12
- Accountant $1,394.02
- Dentist $4,751.32
Latvia’s labour force market
The labour force participation rate in Latvia increased to 69.9% in the third quarter of 2019, while unemployment dropped to 6.3% in the same period from 6.4% in the previous period. The rate of unemployment is highest among the unskilled followed by highly skilled workers. Demand for labour is very high in occupations based on medium-skilled people. Salaries for low-skilled employees are different in various regions of the country, while those for high-skilled employees are similar all over the country. Maintaining appropriate wage levels encourages high-skilled professionals to work in regional companies rather than sticking to the large cities.
According to recent surveys, highest-paid jobs are in Information Technology and financial services, while those with the lowest pay are in hospitality, education, arts, hairdressing, and cleaning. Job opportunities for expats in Latvia are mostly in the sectors of Information Technology, Tourism, and Gastronomy.
Employment Laws and Rights
Employment decisions and laws in the public sector are arrived at through collective bargaining. There’s, however, minimal union influence in the private sector. Contracts are drawn for all employees stipulating the nature of the relationship between the employer and the employee. Employees must be paid a premium if they work for over two hours between 10 pm and 6 am.
Some of the labour rights provided in the Latvian constitution include; the right to remuneration, freedom of association, right to annual paid leave and weekly holidays, the prohibition of discrimination, as well as the right to strike, conclude collective agreements, and join trade unions.
Bonuses and Compensation
Employee benefits vary between positions and sectors. In Latvia, financial services and IT sectors are the most generous with benefits such as telecommunication services, health insurance, fully or partly provided catering, and paid health or sports activities. Employees in the manufacturing sector mainly enjoy life, health, and accident covers. Other benefits granted on top of the monthly wage include; additional holidays, company cars, pension funds, and company products or services.
The wages in Latvia change from time to time, depending on both domestic and international markets. Other determiners include the taxation system, skills of the employee, hierarchical position, level of education, occupational risks, age of the employee, location, the employer, and the type of employment contract.
Income tax in Latvia is a flat 23% regardless of the amount of salary one earns. Corporate tax is at 15% but can be lower depending on the location zone. The Value Added Tax (VAT) is 21% but it’s also determined by the industry involved. Social security tax is 11% for employees and 24.09% for employers. All these taxes are withheld from the salary source before the employees are paid. For expats living in the country temporarily, income generated within the country will be the only one taxed.
Latvia Average Household Income
Household income is the total sum of all types of income of people who share a residence. The income can be from salary, property income, business profits, capital gains, and so on. The data on Latvia’s average annual household income was recorded in December 2017 at $6,613.645, which was an increase from 2016’s value of $5,802.5. This is the highest annual household income value to be recorded in Latvia, while the lowest was in 2004 at $2,206.397. This household disposable income is calculated after deductions such as mortgage and taxes.
Minimum Wage in Latvia
As of 2019, Latvia has maintained its national minimum wage for the last year which was $473.713 per month. This translates to $5,684.60 per year, assuming that an employee earns twelve monthly salaries a year. The minimum hourly wage, on the other hand, is at $2.3699. The government of Latvia punishes any employer who pays wages below the legal minimum. If you’re earning minimum wage, your take-home pay will be lower than these figures after taxes and other deductions such as mandatory social insurance payments are made.
The minimum wage in Latvia is decided either through sectoral collective agreements or by The National Tripartite Cooperation Council. This council comprises the representatives of trade unions and cabinet ministers. Latvia is unlike most countries whose statutory minimum salary is determined by the regional, occupational, or sectoral level of the employee. Instead, it is determined by the age of employees and the risks they are exposed to. Teenagers and employees who are exposed to certain risks are paid a minimum wage of $2.236 per hour.
The stagnation of the minimum wage in Latvia translates to a low purchasing power of employees. On the other side, it benefits the employers since the labour costs are constant while productivity is higher in terms of income. The reason why the minimum salary remained constant is due to weak trade unions and strong private business owner organizations.
Workers in Latvia typically work a 40-hour workweek with 8 hours a day and five days a week. They are also entitled to at least 4 weeks of paid annual leave and 10 days of paid sick leave. Female employees get about 3.5 months of paid maternity leave.
Average Salary in Riga
Riga, the capital city of Latvia, is considered one of the most attractive cities in the European Union. The average gross salary in Riga is $12.55 an hour, $2,170.4 a month, or $26,040 a year. Since these figures are gross salaries, the average net salary after tax and other deductions will come down to about $875.04/month. Salaries in Riga are generally higher than the national salaries by 8%.
The average salary acts as an indicator. Those who earn higher than the average salary are assured of a decent lifestyle. But if your salary is lower than the city’s average, you can only afford to live on a tight budget. It’s therefore important to compare your salary with these national salary reports.
Riga is a major commercial, industrial, financial and cultural centre of the Baltics. It’s also an important seaport for the marine industry. Over 50% of jobs in Latvia are found in Riga since it’s the motor of the country’s economy. The city is inhabited by 68% of the Latvian population and produces more than 50% of the country’s Gross Domestic Product (GDP).
All these factors result in its advancement in technology, infrastructure, and economic growth. High-quality health services, educational institutions, and architecture in Latvia are found in Riga.
Its economy is growing rapidly, availing numerous job opportunities in the labour market. The Information Technology industry is the most productive with a minimum salary of $1,102.26 per month. The C Level Executives are the highest-paid professionals in Riga with a median monthly salary of $57,057.
The quality of life here is the highest in the country. With such good pay, one can live a comfortable life and enjoy everything that the city has to offer without living on credit.
The Cost of Living in Latvia
The cost of living in Latvia is generally low, but it might seem high for foreigners who are not from the European Union (EU). Here’s what common household expenses will cost you in Latvia:
Houses are quite expensive in the city and relatively cheaper outside the city. Monthly rent for a one-bedroom apartment is $383.88 in the city centre and $281.50 outside the City Centre. A three-bedroom apartment’s rent is $686.94 in the City Centre and $485.25 outside the City Centre. If you are thinking of living permanently in Latvia, you can purchase an apartment in the City Centre at $1,797.72/square metre or $1,126.18/square metre outside the City Centre. You can purchase a home on credit and pay mortgage interest rates of 2.52% fixed rate for 20 years.
Local public transport is readily available at $1.27 for a one-way ticket and $55.11 for a monthly pass. If you choose to own a car, purchasing a new Volkswagen Golf or an equivalent car will set you back $19,852.63. Gasoline costs $1.39 per litre.
The cost of food will depend on your lifestyle, size of your household, and how often you cook at home. Common supermarket prices include:
- A litre of milk – $0.98
- Tomatoes (1 kg) – $0.49
- 12 eggs – $1.78
- White rice (1 kg) – $1.42
- A loaf of bread (500g) – $0.92
- Beef round (1 kg) – $8.00
- Local cheese (1 kg) – $6.82
- Potatoes (1 kg) – $0.49
When it comes to dining out, expect to spend about $7.60 for a basic meal in an inexpensive restaurant or $5.51 for a combo meal.
While these are the common expenses in every Latvian household, there are several other expenses you may have to budget for depending on your lifestyle and needs. This includes, but not limited to, clothing, entertainment, utilities, telecommunications, health insurance, child care, and education. On average, the monthly costs (excluding rent) will be $600 for a single expatriate and $2,000 for a family of four.