Social Insurance Contributions (NSIC) – Latvia

Withheld from gross salary automatically. Applies to all employment income up to €105,300 annual cap. Above cap, same rate continues as Solidarity Tax. Lower than EU average of ~15%.

Working pensioners may have reduced or zero employee contributions depending on pension size and employment income. Special rules apply - consult tax advisor.

Paid on top of gross salary (not deducted from employee). Applies up to €105,300 cap. Above cap continues as Solidarity Tax employer portion. Makes total employment cost ~124% of gross salary.

10.5% employee + 23.59% employer = 34.09% total social security burden. Relatively competitive in EU. Funds all social benefits including generous parental leave.

Self-employed pay both portions: similar to combined employee+employer rate but slightly lower. Applied to declared business income. Minimum quarterly payment of €234 (based on minimum wage).

If revenue under €40,000, can use Microenterprise Tax (MET) at flat 25% covering both income tax and social contributions. Simplified regime popular with freelancers and small businesses.

Income exceeding €105,300 subject to Solidarity Tax at same rate as social contributions (34.09% combined). Applied on monthly basis when income exceeds monthly threshold.

Ensures high earners continue contributing to social system even above social security cap. Temporary measure (2025-2027) but likely to continue. Revenue funds general budget.