IIN Tax Rates 2026: 25.5% and 33% Brackets

Two numbers define Latvia's personal income tax landscape in 2026. The first bracket. The second bracket. The threshold between them. Here they are.

The Rates

| Bracket | Annual income | Monthly income | PIT rate | |---|---|---|---| | First | EUR 0 – 105,300 | EUR 0 – 8,775 | 25.5% | | Second | Above EUR 105,300 | Above EUR 8,775 | 33% |

The second bracket is marginal — meaning only the income above EUR 105,300 is taxed at 33%. The first EUR 105,300 always stays at 25.5%.

What This Means in Practice

Salary: EUR 2,000/month (EUR 24,000/year)

All income falls in the first bracket. PIT before deductions: EUR 510/month. With the non-taxable minimum applied (if eligible), the actual PIT is lower.

Salary: EUR 5,000/month (EUR 60,000/year)

Still entirely in the first bracket. PIT before deductions: EUR 1,275/month. No non-taxable minimum at this income level.

Salary: EUR 10,000/month (EUR 120,000/year)

First EUR 8,775/month at 25.5% = EUR 2,238. Remaining EUR 1,225 at 33% = EUR 404. Total monthly PIT: EUR 2,642.

The 33% bracket adds EUR 92 per month compared to a flat 25.5% rate on the same income. The impact is modest unless income significantly exceeds the threshold.

The Solidarity Tax Connection

Above EUR 105,300/year, standard VSAOI is replaced by the solidarity tax at 25% (combined employer + employee portions). This means the EUR 105,300 threshold is doubly significant — it triggers both the higher PIT rate and the solidarity tax simultaneously.

(Details: Solidarity Tax.)

Key Context

These rates apply to employment income, self-employment income, and most other active income. Passive income has different rates:

Dividends from standard CIT regime: 0%
Dividends from alternative CIT regime: 6%
Interest: 25.5%
Rental income (registered): 10%
Capital gains: 25.5%

For the full picture including deductions and the non-taxable minimum, see our complete PIT guide.

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