How Minimum Wage in Latvia Will Change Starting in 2026

Starting 1 January 2026, the minimum monthly wage in Latvia will be €780, which is €40 higher than the previous threshold of €740 introduced at the start of 2025. This increase follows the new calculation method, where the minimum wage is linked to the national average salary – roughly 45–50% of its level.
At the same time, the non-taxable minimum is set to rise from €510 to €550 starting in 2026.

For employees, a higher minimum wage brings several direct benefits:

• Higher income. Workers earning the minimum wage will see their pay rise. Even after taxes and social contributions, take-home pay will be higher, improving purchasing power and overall living standards.
• Better motivation and lower turnover. Higher pay makes jobs more attractive. This can help reduce staff turnover, especially in industries with many minimum-wage positions.
• A sign of state support. Increasing the minimum wage signals government attention to low-income groups, helping reduce inequality and support a more balanced standard of living.

However, it’s important to keep in mind that minimum wage increases are sometimes accompanied by rising prices for goods and services. This can partially offset the positive impact for workers.

For employers, the minimum wage increase brings several significant challenges. Most importantly, labour costs will rise – a particularly sensitive issue for businesses with many low-paid employees. A higher minimum wage also means higher social contributions and taxes, and often requires updating employment contracts and internal pay systems. Budget planning becomes more complex as well. Companies must find a balance between rising expenses, maintaining profitability, and retaining employees. In some industries, this may also lead to price adjustments for products or services to compensate for higher operational costs.

The Latvian government plans to continue gradually increasing the minimum wage over the next few years, moving toward a more predictable and economically grounded model. After the planned increase to €780 in 2026, the next steps are €820 in 2027 and €860 in 2028. These figures follow the new methodology, which ties the minimum wage to a fixed share of the national average. This helps ensure a more stable labour market and allows worker incomes to adjust more smoothly to economic changes.

Below is a year-by-year overview of Latvia’s minimum wage: