How Your Tax is Calculated – Latvia
Latvian tax calculation straightforward with fixed allowances and two-rate system. Electronic systems handle most calculations automatically for employed workers.
How Your Tax is Calculated
Latvian tax calculation straightforward with fixed allowances and two-rate system. Electronic systems handle most calculations automatically for employed workers.
Calculate Gross Income
Sum all income: employment salary, self-employment profits, rental income, investment income, foreign income (if tax resident). This is total before deductions.
Apply Personal Allowance
Subtract €550/month allowance (€6,600/year) for standard taxpayers, or €1,000/month (€12,000/year) for pensioners. Plus €250/month per dependent if applicable.
Calculate Income Tax
Apply 25.5% rate to income up to €105,300 (after allowances). Apply 33% to portion above €105,300. Apply additional 3% to portion above €200,000. Sum all portions.
Calculate Social Contributions
Employee: 10.5% of gross salary (before allowances) up to €105,300, then Solidarity Tax at same rate above. Employer pays 23.59% separately (not from your salary).
Total Tax Liability
Income tax (after allowances) + Employee social contributions (10.5% of gross) = total deducted from salary. Monthly withholding by employer. Annual settlement if needed.
Example: €30,000 annual salary (single, no dependents)
Employer's total cost is ~124% of gross salary. With dependents, would save additional €3,000/year per dependent (€250×12). Pensioners would save additional €5,400/year with enhanced allowance.
Calculate Your Tax in Latvia
Free calculator: net income and effective tax rate in seconds
Open Calculator