The personal income tax (PIT) exempt minimum amount for old-age, disability, service and survivors pensions is 1000 euros a month in 2025.
From 1 January 2025, the personal income tax (PIT) rate will increase to 25.5%. This means that a pension of more than 1000 euros is subject to a 25.5% PIT tax rate.
Non-working beneficiary of a pension
A non-working beneficiary of a pension does not have to do anything - the State Social Insurance Agency (SSAA) will apply a tax-exempt minimum amount of 1000 euros to the pension from 1 January 2025.
Example: Peter receives an old-age pension of 650 euros.
In 2024, when the tax-exempt minimum amount was 500 euros, the SSAA paid Peter 620 euros each month, as the 20% PIT tax rate was withheld from the amount that exceeded the tax-exempt minimum amount.
In 2025, the tax-exempt minimum amount is 1000 euros, so the SSAA will PAY Peter's pension every month in the amount allocated to him - 650 euros.
Working beneficiary of a pension
The tax-exempt minimum amount will apply to the pension of a working beneficiary of a pension based on the place where the payroll tax book is submitted. Every working beneficiary of a pension has the freedom to choose how the 1000 euros tax-exempt minimum amount will be applied:
- 1000 euros apply to the pension if the payroll tax book is submitted to the SSAA;
- 500 euros apply to pension and 500 euros to wage if the payroll tax book is submitted to the employer.
If the payroll tax book is submitted before the 15th of the month, the changes are applied by the SSAA from the first day of the following month; if after the 15th, the changes are applied from the first day of the month after the following month. Information from the State Revenue Service (SRS), including how to collect your payroll tax book from your employer or submit it to your employer, here.
For information! When submitting your 2026 annual income tax return to the SRS for 2025, pensioners will be able to receive repayment of the 25.5% PIT for the unused tax-exempt minimum amount.
1. Example: Anna has an old-age pension of 700 euros and she also receives a wage of 900 euros. In the beginning of the January Anna withdrew her employer's payroll tax book from the electronic declaration system (EDS) (until 15 January) in order to apply the 1000 euros tax-exempt minimum amount from February only to her pension. So, from February, the SSAA will pay Anna her full pension of 700 euros. As the tax-exempt minimum amount is 1000 euros, in 2026 she will receive a refund of 25.5% of the unused tax-exempt minimum amount of 300 euros (1000-700) when submitting her annual income tax return for 2025 to the SRS. For wage, the employer will withhold PIT from the first euro.
As Anna's payroll tax book was submitted to her employer in January, the tax-exempt minimum amount is automatically split in January - 500 euros apply to the pension and 500 euros to the wage. 25.5% PIT is applied to the part of the pension exceeding 500 euros. SSAA will pay a pension to Anna amounting 649 euros (700-51). (In 2024 660 euros were paid (700-40) because of the lower PIT - 20%.)
When Anna submits her annual income tax return to the SRS in March 2026, she will receive repaid PIT for the 2025 period from January to December, when the tax-exempt minimum amount only applied to her pension. PIT for 11 months from the monthly unused tax-exempt minimum amount is 841.5 euros.
2. Example: John has a pension of 1200 euros, he also works and has submitted his payroll tax book to his employer. From 1 January, his pension is subject to a split pensioner's tax-exempt minimum amount of 500 euros. The PIT in the amount of 178.50 euros is deducted from the pension ((1200-500)x25.5%) and the pension payable to him is 1021.50 euros (1200-178.50). Also the employer applies to the wage the split tax-exempt minimum amount of the pensioner of 500 euros.
The tax breaks for dependants or additional tax breaks for persons with disabilities and politically repressed persons will continue to be applied by the payer of the income who has the payroll tax book submitted.
You can find out where your payroll tax book is submitted:
- On the Electronic Declaration System (EDS) of SRS In case of questions you can call the SRS help line 67120000, ask questions in writing in the EDS section "Correspondence with SRS" or consult the nearest State Revenue Service or State and local Government Unified Customer Service centres throughout Latvia.
- By asking your employer.
Please note! For working beneficiaries of a pension who have submitted their payroll tax book to their employer, the 500 euros tax-exempt minimum amount will already apply to pensions paid in January , but not to the wage received. Your employer pays your wage in January for December, so it will be in the same amount in January. In February, pensioner will receive January wage with the 500 euros tax-exempt minimum amount already applied.