Self-employed tax calculator
In 2026 a self-employed person in Latvia pays 31.07% social insurance (VSAOI) on an object of their choice of at least the €780 monthly minimum wage, plus 10% for pension insurance on the rest of the profit, and in a month with profit under €780 only 10% of all of it (Law on State Social Insurance, section 14.1). Personal income tax (IIN) is 25.5% of annual profit after the VSAOI paid and the €550 monthly non-taxable minimum, and 33% on the part above €105,300 (Personal Income Tax Law, section 15(2)).
Calculator
A year
An average month
- General regime 24,000 €
- Microenterprise tax 24,000 €
Under microenterprise tax (25% of turnover) you would pay 7,500.00 € and keep 16,500.00 €.
What the calculator assumes
- Profit (revenue less expenses) is spread evenly over 12 months, because the minimum wage test runs month by month. If your months differ, VSAOI can differ too.
- There is no other income. If you also have a salary and use the non-taxable minimum there, untick the box.
- The VSAOI you pay reduces your annual taxable income, as section 10 of the Personal Income Tax Law provides.
- Above €105,300 a year no VSAOI is counted and the solidarity tax is not modelled, so the result is only indicative there.
- The microenterprise tax comparison assumes you are not VAT-registered and turnover stays within €50,000.
Example: €30,000 revenue and €6,000 expenses a year
A developer works as a sole trader. Profit is €24,000 a year, or €2,000 a month, and he pays VSAOI on the minimum €780 object.
| Item | A year |
|---|---|
| Profit | €24,000.00 |
| VSAOI 31.07% on €780 a month | €2,908.20 |
| VSAOI 10% on €1,220 a month | €1,464.00 |
| Non-taxable minimum | €6,600.00 |
| Taxable income | €13,027.80 |
| IIN 25.5% | €3,322.09 |
| Kept after tax | €16,305.71 |
Taxes take €7,694.29, 32% of profit. Under the microenterprise tax he would pay €7,500.00 on the same €30,000.
Self-employed taxes and rates in 2026
| What | Rate or amount | Legal basis |
|---|---|---|
| VSAOI when monthly profit is at least €780 | 31.07% on the chosen object (at least €780) | Law on State Social Insurance, section 14.1; Cabinet Regulation No. 786 |
| VSAOI on profit above the object | 10% for pension insurance | Law on State Social Insurance, section 14.1 |
| VSAOI when monthly profit is under €780 | 10% of all profit | Law on State Social Insurance, section 14.1 |
| VSAOI at state pension age | 29.36% | Cabinet Regulation No. 786, paragraph 10 |
| Maximum VSAOI object | €105,300 a year | Law on State Social Insurance, section 14(5) |
| IIN | 25.5% up to €105,300, 33% above | Personal Income Tax Law, section 15(2) |
| IIN surcharge | 3% on income above €200,000 | Personal Income Tax Law, section 15.1 |
| Non-taxable minimum | €550 a month (€6,600 a year), pensioners €12,000 a year | Personal Income Tax Law, section 12; transitional provision 197 |
| Minimum monthly wage | €780 | Cabinet Regulation No. 656 |
How VSAOI is worked out
Income for VSAOI is that month’s revenue less that month’s expenses, and each month is compared with the minimum wage on its own.
- A month with €400 profit: 10% of €400 = €40.
- A month with €4,100 profit: 31.07% of €780 = €242.35, plus 10% of €3,320 = €332.
- A month with no profit: no VSAOI.
- You may choose an object above €780. It raises the contributions, and also future pension, sickness and parental benefits.
The self-employed report is filed quarterly by the 17th of the month after the quarter, and VSAOI is paid by the 23rd of that month. Since 1 January 2026 the minimum contributions (€780 × 3 a quarter) no longer apply to the self-employed.
How IIN is worked out
IIN is worked out once a year in the annual income return. From annual profit you take off the VSAOI paid and the non-taxable minimum, unless it is used at a salary job, and the rest is taxed at 25.5%, with 33% on the part above €105,300. There have been no advance payments for the self-employed since 2023.
The return is filed between 1 March and 1 June and the tax paid by 23 June. With income above €105,300 you file between 1 April and 1 July and pay by 23 July. A bill over €640 can be paid in three parts.
Microenterprise tax as an alternative
A sole trader who is not VAT-registered can choose microenterprise tax instead: 25% of all turnover, as long as it stays within €50,000 a year (Microenterprise Tax Law, sections 4 and 6). Expenses and reliefs do not count, so it only pays off when expenses are low. An SIA has not been able to use it since 2022.
On 17 September 2026 the Saeima adopted amendments introducing a beginner microenterprise tax of 10% of turnover from 1 April 2027, for individuals with turnover up to €12,000 a year who sell only to other individuals and have no employees.
Frequently asked questions
- How much tax does a self-employed person pay in Latvia in 2026?
- VSAOI of 31.07% on at least €780 a month plus 10% on the rest of the profit, and IIN of 25.5% on annual profit after VSAOI and the non-taxable minimum. On €2,000 of monthly profit, taxes take about 32% of it.
- What if I earn less than the minimum wage in a month?
- For that month you pay only 10% of all profit for pension insurance. The full 31.07% rate applies only to months with profit of at least €780.
- Do the self-employed pay minimum VSAOI in 2026?
- No. Amendments to the Law on State Social Insurance of 16 April 2026 removed the minimum contribution object for the self-employed, microenterprise tax payers included, from 1 January 2026.
- Does a self-employed person get the non-taxable minimum?
- Yes, in the annual income return, unless it is already used at a salary job. In 2026 it is €550 a month, or €6,600 a year, and €12,000 a year for a pensioner. In 2027 it rises to €570 a month.
- Do I have to make IIN advance payments?
- No. Advance payments were abolished on 1 January 2023. IIN is worked out and paid after the annual income return.
- When is microenterprise tax cheaper?
- When expenses are low. It is 25% of turnover, not of profit, so with large expenses it costs more. The calculator shows both side by side while turnover stays within €50,000.
Sources
- Law on State Social Insurance, sections 14, 14.1, 20.4 (likumi.lv, Latvian)
- Personal Income Tax Law, sections 10, 12, 15, 15.1 (likumi.lv, Latvian)
- Cabinet Regulation No. 786 on the split of the VSAOI rate (likumi.lv)
- Cabinet Regulation No. 656 on the minimum monthly wage (likumi.lv)
- VID guidance on self-employed VSAOI 2026, updated 05.05.2026 (vid.gov.lv, Latvian)
- Microenterprise Tax Law (likumi.lv, Latvian)
- Saeima: beginner microenterprise tax, 17.09.2026 (saeima.lv, Latvian)
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