Before you start

Personal code (personas kods)
Smart-ID, a bank login or another accepted identity to access EDS
A Latvian bank account for refunds

Step-by-step

1
Register with the VID and get EDS access
The State Revenue Service identifies you by personal code. EDS is where returns, wage tax books and refunds all live.
OnlineWho: You
2
Set your wage tax book with one employer
The non-taxable minimum and any dependant allowances are applied through the electronic wage tax book, and only at one payer. With two jobs, choose which one and record it.
OnlineWho: You
3
Check the contribution ceiling if you are well paid
The maximum annual base for mandatory social contributions is €105,300 — the same figure as the income tax band boundary. Above it, social contributions stop while the 33% rate begins.
Via employerWho: Your employer
4
File the annual return in EDS
Returns are filed electronically for the preceding calendar year and are largely pre-filled from employer reporting. Filing is how you recover eligible medical, education and pension deductions.
OnlineWho: You
5
Declare foreign income if you are tax resident
Latvian tax residents are taxed on worldwide income. Foreign salary, rent and investment income belong on the return, with treaty relief applied where available.
OnlineWho: You

Documents you’ll need

Personal code
Electronic identity for EDS
Annual income statements
Receipts for deductible medical and education expenses
Latvian bank account details for refunds

Things most newcomers don’t know

The 2025 restructuring is recent enough that most sources are still wrong.

Latvia moved from three progressive rates to two — 25.5% up to €105,300 and 33% above — and abolished the graduated non-taxable minimum in favour of a flat one. The change took effect on 1 January 2025. Articles quoting 20/23/31% and a means-tested allowance are describing the previous system, and the difference in a net-pay calculation is material.

Source: Latvian Ministry of Finance — changes in taxation and finances from 2025

The band boundary and the social contribution ceiling are the same number, and that is deliberate.

€105,300 is both where income tax steps to 33% and the maximum annual base for mandatory social contributions. Cross it and your marginal position changes twice at once: the income tax rate rises while social contributions stop. For anyone negotiating around that level, the net effect is not what a single-rate calculation suggests.

Source: Latvian Ministry of Finance — 2025 tax changes

The flat non-taxable minimum is a real simplification, and it rises on a published schedule.

€510 a month in 2025, €550 in 2026, €570 from 2027 — applied uniformly regardless of income, replacing an allowance that tapered away as you earned more. Working pensioners get a considerably higher figure. Because the schedule is published in advance, you can model next year's net pay accurately, which was not previously possible.

Source: Latvian Ministry of Finance — non-taxable minimum schedule

The headline 25.5% understates the wedge by about a third.

Employer social contributions of 23.59% sit on top of your gross salary rather than inside it, on top of your own 10.5%. Total mandatory contributions are 34.09%. That funds health care and pensions rather than disappearing, but it means the true cost of employing you is roughly a quarter above your gross — worth knowing in a salary conversation.

Source: Latvian Ministry of Finance — social insurance contribution rates

Common mistakes to avoid

Using a pre-2025 net salary calculator — both the bands and the allowance changed.
Failing to set the wage tax book, and overpaying the non-taxable minimum all year.
Applying the allowance at two payers and owing money at filing.
Assuming the 3% additional rate applies from €105,300 — it starts at €200,000.
Forgetting deductible medical and education expenses, which are recovered only by filing.

Some of this may be out of date. Spotted something inaccurate? Help us keep it right for the next newcomer.