Social Contributions in Latvia (2026): Employee VSAOI at 10.5%
Latvian employees pay mandatory state social insurance (valsts socialas apdrosinasanas obligatas iemaksas, VSAOI) at 10.5% of gross salary, capped at a maximum object of EUR 105,300 per year. Employers pay a further 23.59%. The employee contribution is deducted from gross before income tax. Verify with VID (vid.gov.lv).
The employee VSAOI rate
Employees pay 10.5% of gross salary in VSAOI. This funds pensions, unemployment, sickness, maternity and disability insurance. The employer separately pays 23.59% on top of the salary, so the combined VSAOI rate is 34.09%. The employer share is a cost to the business and does not appear as a deduction on the employee payslip. VSAOI is withheld before income tax, reducing the income-tax base.
The contribution ceiling
VSAOI applies to annual income up to a maximum object of EUR 105,300 (2026). Above that ceiling no further contributions are due, so very high earners pay VSAOI only on the first EUR 105,300. The ceiling is set annually; confirm the current figure with VID or the Ministry of Finance before relying on it for high salaries.
How VSAOI and income tax combine
The monthly payroll sequence is: (1) deduct VSAOI 10.5% from gross; (2) deduct the non-taxable minimum EUR 550; (3) apply the progressive income tax to what remains; (4) net = gross minus VSAOI minus income tax. For a EUR 3,000/month gross salary: VSAOI 315, minimum 550, taxable 2,135, income tax approx. 533 (mostly at 25.5%), net approx. EUR 2,152.
FAQ
Is there a ceiling on VSAOI?
Yes. Employee and employer VSAOI apply only up to a maximum annual object of EUR 105,300 in 2026. Income above the ceiling is not subject to further VSAOI. Confirm the current ceiling with VID.
Does the employer pay social contributions too?
Yes. On top of the employee's 10.5%, the employer pays 23.59% of the salary, for a combined 34.09%. The employer share is not deducted from your pay -- only the 10.5% employee part reduces your net.
Are VSAOI contributions deductible from income tax?
Yes. The employee VSAOI is deducted from gross before the income tax is calculated, so you are not taxed on the part of your salary paid as social contributions.
⚠️ Informational estimate, not tax advice. Payroll software may differ in edge cases. Verify with a professional.