The State Social Insurance Agency (SSIA) explains how this year the non-taxable minimum for pensioners is taken into account and how personal income tax (PIT) is "deducted" from pensions.
The Less We Have, the Less They Can Take Away
The non-taxable minimum for pensioners is 12,000 euros per year, or 1,000 euros per month. This means that part of the pension up to 1,000 euros per month is NOT subject to personal income tax (PIT) of 25.5%.
The State Social Insurance Agency (SSIA) applies the non-taxable minimum of 1,000 euros per month to the pensions of individuals who:
- are not working;
- are working but have not provided their tax book to the employer.
If a pensioner decides to split their non-taxable minimum, half is applied to the pension paid by the SSIA (500 euros or 1/24 of the annual non-taxable minimum for pensioners), and the other half is applied to their salary.
This means that a separate non-taxable minimum of 500 euros is applied to the pension at the recipient's choice, rather than 1,000 euros.
Which Pensioners Are Entitled to Tax Benefits
If a pensioner is entitled to benefits under PIT, they are applied at the place of income where the tax book is presented, explains the SSIA.
In addition to the non-taxable minimum, the following PIT benefits may apply:
*** for dependents – 250 euros per month.**
*** for persons with disabilities:**
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Group 1 or 2 disability – 1,848 euros per year (154 euros per month);
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Group 3 disability – 1,440 euros per year (120 euros per month);
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for politically repressed persons and participants in the national resistance movement – 1,848 euros per year (154 euros per month).
How Taxes Are Calculated: Examples
When calculating the income tax on pensions, the SSIA considers both the non-taxable minimum for pensioners and the PIT benefits, if they are applicable.
Income tax of 25.5% is withheld from the part of the pension that exceeds the non-taxable minimum for pensioners and the applicable benefits.
IMPORTANT: if a senior's pension does not reach 12,000 euros within a YEAR, no income tax is withheld from the pension.
For example, if in 2025 – before indexing, the pension was less than 1,000 euros per month, and from October after indexing it exceeded 1,000 euros, but the total annual pension did not exceed 12,000 euros, then it is not taxed.
However, starting from January 1, 2026, if the pension exceeds 1,000 euros per month, PIT will be withheld from the "excess" due to exceeding the non-taxable minimum for pensioners.
Example 1: Non-working Pensioner
From January 1, 2025, an elderly person was assigned an old-age pension of 950 euros for 45 years of Latvian insurance experience, and he decided not to work anymore.
From October 1, 2025, after indexing – taking into account his experience with an index of 1.0787, the amount of his pension increased to 1,024.77 euros.
The total pension accrued for 2025 is 8,550.00 euros (950 x 9 months) + 3,074.31 euros (1,024.77 x 3 months) = 11,624.31 euros. This is less than the non-taxable minimum for pensioners of 12,000 euros.
Therefore, in 2025, no income tax was withheld from his pension.
However, starting from January 1, 2026, this senior's pension is already subject to tax in the amount of 6.32 euros ((1,024.77 – 1,000) x 25.5%). That is: the pensioner will receive 1,018.45 euros (1,024.77 – 6.32).
Example 2: PIT Deductions for Disabled Persons Considering Benefits
Suppose that from November 1, 2024, a certain resident of Latvia was assigned a disability pension of Group 3, which from January 1, 2025, amounts to 189.00 euros, and he is not working.
From October 1, 2025, with an index of 1.0635, the pension increased to 201.00 euros.
However, from November 1, 2025, this person was assigned Group 2 disability and a disability pension of 1,200.00 euros per month.
The accrued pension for 2025 amounts to 1,701.00 euros (189.00 × 9 months) + 201.00 euros (201.00 × 1 month) + 2,400.00 euros (1,200.00 × 2 months) = 4,302.00 euros, which is less than the non-taxable minimum for pensioners of 12,000 euros per year and the established tax benefits for the individual due to disability.
That is: in 2025, PIT is not withheld from the pension.
But starting from January 1, 2026, the non-taxable minimum of 1,000.00 euros and the PIT benefit for Group 2 disability of 154.00 euros per month will apply to the pension.
Thus, the taxable amount is 46.00 euros (1,200.00 – 1,000.00 – 154.00), the tax is 11.73 euros, and the paid pension is 1,188.27 euros (1,200.00 – 11.73).
How to Split 1,000 Euros
If a senior's salary is significantly higher than their pension, they can split their non-taxable minimum of 1,000 euros into 500+500. To do this, they need to submit their tax book to the employer.
The "split" option in the electronic declaration system of the State Revenue Service - EDS looks like this:
the section "Tax Book for Salary /"Algas nodokļa grāmatiņa" in the column "Place of income where the tax book for salary is submitted /"Ienākuma gūšanas vieta, kur iesniegta algas nodokļa grāmatiņa" will indicate the employer of the pensioner.
In this case, both the pension payer (State Social Insurance Agency, VSAA) and their employer will apply half of the non-taxable minimum for pensioners (500 euros per month each).
If the senior does not submit the tax book to the employer, the non-taxable minimum will only apply to the pension of the pensioner, as before. And in the column "Place of income where the tax book for salary is submitted," the pension payer - VSAA will be indicated.
IMPORTANT: if a working pensioner does not take the opportunity to apply the non-taxable minimum separately, they still have the option to submit an annual income declaration and receive a refund of overpaid income tax (that is, money for justified expenses - treatment, etc.).
And also: for the non-taxable minimum for pensioners to be split in the next month, the pensioner must provide the employer with the tax book by the 15th of the current month.
Other Pension Innovations - 2026
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Starting from January 1, 2026, the minimum pension amounts for old-age pensions have increased. The calculation base for the minimum old-age pension will increase from 189 to 213 euros, and for persons with disabilities from childhood – from 226 to 255 euros.
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The amount of the minimum old-age pension is determined by applying a coefficient of 1.2 to the calculation base, and for each year of work experience exceeding 20 years, the amount increases by 2% of the calculation base.
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The restoration of supplements for experience until December 31, 1995, continues. In 2026, supplements will be assigned to people who retired in 2018, 2019, and 2020.
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An automatic recalculation of pensions for working pensioners will begin. If by January 31, the senior does not inform the SSIA of another date, then from April 1, 2026, in cases where insurance payments were made for the pensioner (that is, they were employed), the recalculation of old-age or disability pensions will occur automatically.
