How Latvia's Social Insurance Treats Employees, the Self-Employed and Micro-Enterprise Tax Payers
An explainer from Latvia's State Social Insurance Agency compares the contributions and benefits under different tax regimes. Employees get the widest coverage, with employers paying most of the contributions.
Latvia has about one million socially insured people. The system is meant to replace income after retirement, job loss, illness, pregnancy and maternity leave, and in other cases. An explainer by specialists of the State Social Insurance Agency (VSAA), published by the LV portāls website, shows how contributions and later benefits differ for employees, the self-employed, micro-enterprise tax (MUN) payers and recipients of author's fees. It matters for anyone choosing a tax regime, because benefit size depends on it.
Employees
The law requires social insurance for all employees from the age of 15 and for the self-employed. Employees are the largest group, at more than 880,000 people, including seasonal agricultural workers and start-up employees. They are insured for pensions, unemployment, workplace accidents and occupational diseases, sickness, disability, maternity, paternity, parental insurance and health insurance.
In the general case the mandatory contribution rate is 34.09%: the employer pays 23.59% and the employee 10.50%. With a salary of 780 euros (the 2026 minimum wage), the employer's contribution is 184 euros, and 81.90 euros is withheld from the employee's pay. Sickness and maternity benefits are 80% of the contribution salary, so for a 780-euro salary the maternity benefit would be 624 euros.
The self-employed
There are just under 80,000 self-employed people, including those who also receive author's fees and pay micro-enterprise tax. They are not insured against unemployment or workplace accidents. In the general regime the rate is 31.07% if monthly profit reaches 780 euros; if profit is lower, they pay 10% for pensions only, and then there is no sickness insurance.
Micro-enterprise tax
MUN is 25% of turnover, of which 80% goes to social contributions. With turnover of 780 euros, a sickness benefit could be about 409 euros a month. Sickness benefit is paid from the 10th day of illness.
An author's fee recipient who does not register economic activity is insured like a self-employed person, because the payer withholds 25% personal income tax, of which 80% is social contributions.
