Gross salary
In Latvian: Bruto alga
Gross salary (bruto alga) is pay before tax is withheld: the amount on which the employee VSAOI and IIN are calculated. On top of it the employer pays its own VSAOI share of 23.59%.
Under the Labour Law, pay includes salary, allowances, bonuses and any other remuneration for work, and the VSAOI base is all employment income from which IIN is withheld. From gross salary the employee loses 10.5% VSAOI and 25.5% IIN on what remains after VSAOI, the non-taxable minimum and reliefs.
Gross salary is not the full cost to the employer: on a gross salary of EUR 1,500 the employer also pays 1,500 × 23.59% = EUR 353.85 in VSAOI. Annual gross income also drives progressive IIN: the part above EUR 105,300 a year is taxed at 33%.
Example
Gross salary EUR 1,500 in 2026, tax book filed, no dependants: VSAOI EUR 157.50, IIN (1,500 − 157.50 − 550) × 25.5% = EUR 202.09, net pay EUR 1,140.41. The employer pays a further EUR 353.85 in VSAOI.
Legal basis
- Labour Law, Section 59 likumi.lv
- Law on State Social Insurance, Section 14 likumi.lv
- Law on Personal Income Tax, Section 15 likumi.lv
This explanation is for information and does not replace tax or legal advice. The law in its current consolidated text prevails.