Parental allowance
From 1 January 2025 to 31 December 2025, the parental allowance shall be paid in the amount of 75% from the allocated allowance amount to a person who is employed or self-employed and not on parental leave at the time of receipt of the parental allowance.
Parental allowance is paid for the previous month. This means that if a recipient works in December and continues to work in January 2025, they will be paid 50% of their parental allowance for December in January and 75% of their parental allowance for January in February.
State social benefits
As of 1 January 2025 the care of disabled child benefit increases from 313.43 euros to 413.13 euros. The State Social Insurance Agency (SSIA) will grant and pay the new benefit from January. The SSIA will recalculate the benefit automatically, no application is required.
As of 1 January 2025, persons with group I eye-sight disability can receive benefit for the use of assistant also by home delivery (until now, it was only possible to receive it by transfer to a credit institution or Postal System Payment Account). Thus, if a person receives other benefits or pensions from the SSIA delivered by a postman at his/her place of residence, he/she can also choose to receive the benefit for the use of an assistant delivered at his/her place of residence.
If the benefit has already been granted, you can change the way of receiving the benefit by submitting an application to the SSIA "Change of bank account or pay-out address".
Pensions and remunerations
The minimum amounts for pensions and remunerations, and the state social security benefits are to increase on 1 January 2025. The new rates and the payment procedure are explained here.
In 2025, the retirement age will be 65 years, and 63 years for early retirement.
As of 2025, an old-age pension is granted to persons who have reached the age for old-age pension and have at least 20 years of pensionable service accrued.
From January 2025, Latvian old-age and disability pensions granted between 1 January 2015 and 31 December 2017 will be allocated an added allowance for the pensionable service accrued before 31 December 1995, and will be taken into account in the calculation of the pension. The amount of the added allowance will be 1.62 euros per year of service.
2nd pension pillar
From 1 January 2025 to 31 December 2028 the breakdown of the pension contribution rate changes: one percentage point is transferred from 2nd pension pillar to 1st pension pillar. This means that during this period, the contribution rate on personal income is 5% for 2nd pension pillar and 15% for 1st pension pillar.
Contributions to the account of the 2nd pension pillar member are recorded in the fourth month following the reference month. So the 5% contribution on January income will appear on the member's account statement in May 2025.
The amount of the deceased member of the 2nd pension pillar in 2025 must be 58.10 euros or more to be eligible for inheritance or to be added to the accumulated capital of a nominated person.
Personal income tax and tax-exempt minimum amount for services paid to the SSIA
From 1 January 2025, the personal income tax (PIT) rate will increase to 25.5%. This rate is also applied to services paid to the SSIA:
- Sickness benefit,
- Pensions,
- Inherited 2nd pension pillar capital, if the heir chooses to receive it by transfer to an account with a credit institution,
- Overpaid mandatory state social insurance contributions.
Unified (fixed) tax-exempt minimum amount of 510 euros per month is determined for the payer. It applies to the payment of sickness benefit. For periods of incapacity for work:
- Until 31 December, the SSIA applies the State Revenue Service's (SRS) projected tax-exempt minimum amount and 20% PIT rate to the sickness benefit granted for 2024;
- From 1 January, tax-exempt minimum amount of 510 euros and 25.5% PIT rate.
Exempt minimum amount for recipients of old-age, disability, service, survivors and special state pensions is 1000 euros per month in 2025.
Working beneficiaries of a pension has the freedom to choose how the 1000 euros tax-exempt minimum amount will be applied:
- 1000 euros to the pension if the payroll tax book is submitted to the SSIA.
If the pension is less than 1000 euros, you can get a refund of your PIT when you submit your annual income tax return to the SRS.
- 500 euros to pension and 500 euros to wage (split tax-exempt minimum amount) if the payroll tax book is submitted to the employer.
In order to apply the tax-exempt minimum amount from the following month, the employer must submit the payroll tax book to the SRS electronic declaration system by the 15th of the current month.
For working pensioners, the SSIA applies the tax-exempt minimum amount automatically, taking into account where the payroll tax book is submitted
Mandatory state social insurance contributions
Because the minimum monthly wage is set at 740 euros from 1 January 2025
- self-employed individuals, if their monthly income
- is less than 740 euros, must pay the mandatory state social insurance contributions (mandatory contributions) in the amount of 10% for pension insurance;
- is equal to or is more than 740 euros, must pay mandatory contributions for the minimum 740 euro amount at a rate of 31.07% for all types of insurance, and from the difference between the actual income and the amount subject to mandatory contributions - 10% for pension insurance.
- for persons who voluntarily participate in state social insurance and pay mandatory contributions voluntarily, the minimum amount subject per calendar year is 8880 euros. This means that mandatory contributions must be paid from at least this amount every year.
From 1 January 2025 to 31 December 2027, the maximum annual amount subject to state social insurance mandatory and voluntary contributions is set at 105 300 euros.
SSIA will calculate the minimum mandatory state contributions for those employees and self-employed individuals whose quarterly income reported to the SRS will be less than 2220 euros (three minimum monthly wage amounts).
The special royalty taxation scheme will remain in place between 1 January 2025 and 31 December 2027. This means that in 2025, people earning income from royalties will also have the right not to register as performers of economic activity, and the current procedure pertaining to the amounts subject to mandatory contributions and the minimum mandatory state social insurance contributions will remain the same.