How is income tax calculated in Latvia?
Latvia applies 25.5% to annual income up to EUR 105,300 and 33% above that. The employer applies a fixed personal allowance of EUR 550 a month (EUR 6,600 a year) whatever the income.
The employee pays national social insurance of 10.5% on income up to EUR 105,300. Compulsory employee social insurance is deductible from taxable income. There are no municipal income taxes.
What is the income tax rate in Latvia?
| Taxable income | Rate |
|---|---|
| €0 – €105,300 | 25.5% |
| Over €105,300 | 33% |
What mandatory salary deductions apply?
- National social insurance (employee): 10.5% of pay, on up to 105,300 a year.
Gross salary and take-home salary
Gross salary is what your contract says before anything is taken off. Take-home salary is what reaches your bank account after income tax and the compulsory employee contributions. Employer contributions are paid on top of your salary and are not taken from it.
Example: €2,700.00 a month
An employee earning 2,700 a month, about US$3,000.
| Item | Monthly | Annual |
|---|---|---|
| Gross salary | €2,700.00 | €32,400.00 |
| Income tax | €475.96 | €5,711.49 |
| Compulsory contributions | €283.50 | €3,402.00 |
| Take-home pay | €1,940.54 | €23,286.51 |
Effective income tax rate 17.6%; all deductions 28.1%.
Frequently asked questions
What is the personal allowance in Latvia for 2026?
EUR 550 a month, or EUR 6,600 a year, regardless of income.
Is social insurance capped?
Yes. It is charged on income up to EUR 105,300 a year.
Is there an extra rate for very high incomes?
An additional 3% applies to total annual income above EUR 200,000, settled through the annual tax return.
Official sources
- PwC Worldwide Tax Summaries (reviewed 30 June 2026): Taxes on personal income. Read 5 November 2026.
- PwC Worldwide Tax Summaries (reviewed 30 June 2026): Other taxes. Read 5 November 2026.
- PwC Worldwide Tax Summaries (reviewed 30 June 2026): Deductions. Read 5 November 2026.
Last reviewed 5 November 2026. An estimate for planning, not tax advice; your employer’s payroll and the tax authority decide what is actually withheld.
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