CalculatorsRates: 2026 and 2027
Self-employed or employed?
For the same amount the payer spends, a self-employed person keeps more. How much more depends entirely on the income level, and at the minimum wage the difference is almost nothing. Here are both calculations side by side, along with everything the numbers do not show.
- Employer's contributions
- 23.59%
- Self-employed, on the base
- 31.07%
- Above the base, pension only
- 10%
Calculation
Your figures
6004000+
The employer's full cost including taxes, or the invoice amount paid to a self-employed person. The comparison is only honest when both sides start from the same number.
Year
Minimum wage used as the contribution base
A self-employed person's contribution base is the minimum wage, so its level changes this result, unlike an employee's take-home pay. For 2027 the tripartite council backed 820 EUR; the Cabinet still has to adopt it.
As an employee2027 · EUR
1145,51
- Gross salary
- 1500,00
- Employer's social contributions 23.59%
- 353,85
- Employee's social contributions 10.50%
- 157,50
- Income tax
- 196,99
As self-employed2027 · EUR
1259,64
- Income after expenses
- 1853,85
- Contributions at 31.07% of the base
- 254,77
- Contributions at 10%, pension only
- 103,38
- Income tax
- 236,05
Difference per month: 114,13 EUR in favour of self-employment. Per year: 1369,53 EUR.
Comparison
The gap grows with income
At the minimum wage the choice changes nothing financially. The larger the amount, the more it matters that an employer pays 23.59% on top of the salary while whoever pays an invoice pays nothing on top at all.
| Payer spends | Employee keeps | Self-employed keeps | Difference |
|---|---|---|---|
| 964,00 EUR | 665,43 | 669,27 | +3,84 |
| 1235,90 EUR | 812,13 | 851,58 | +39,46 |
| 1483,08 EUR | 945,48 | 1017,32 | +71,84 |
| 1853,85 EUR | 1145,51 | 1265,92 | +120,41 |
| 2471,80 EUR | 1478,90 | 1680,25 | +201,35 |
| 3089,75 EUR | 1812,29 | 2094,59 | +282,30 |
Calculated for 2027 with a 780 EUR contribution base, no dependants and no business expenses.
Caveats
What the numbers do not show
Most contributions above the base buy pension and nothing else
The 31.07% rate on the minimum wage buys full cover: pension, disability, maternity, paternity, sickness and health insurance. On everything above that base the rate is only 10%, and it goes to pension alone. In practice that means lower sick pay and lower parental benefit than an employee on the same income.
No paid holiday and no employer-paid sick days
An employee is entitled to paid annual leave and to the first sick days paid by the employer. A self-employed person gets neither, so part of the difference this calculator shows is payment for carrying that risk rather than a clear gain.
The tax authority can reclassify the relationship
If the arrangement has the marks of employment, meaning set hours, subordination to instructions, a workplace and the employer's equipment, the State Revenue Service can treat it as employment and assess every tax owed plus penalties and late-payment interest. Working with a self-employed contractor is lawful when it genuinely is an independent service, not employment under another name.
Business expenses are not included here
A self-employed person deducts business expenses from income, and that is the largest lever this calculator cannot see. The figure entered here is already income after expenses. The real difference can be larger if expenses are significant, or smaller if there are none.
Questions
Frequently asked questions
Does a self-employed person keep more than an employee?
At equal cost to the payer, yes, but far less than people assume. If an employer spends 964 EUR a month on an employee, which is the minimum wage, the employee keeps 665.43 EUR while a self-employed person on the same amount keeps 669.28 EUR. The difference is 3.84 EUR. At 1853.85 EUR of payer cost the gap is 120.41 EUR a month, and at 3089.75 EUR it is 282.30 EUR. The higher the income, the more it matters that an employer pays 23.59% on top of the salary while whoever pays an invoice pays nothing on top.
What social contributions does a self-employed person pay in Latvia?
If monthly income reaches the minimum wage, contributions are 31.07% of the minimum wage, plus a further 10% for pension insurance on everything above it. If income is below the minimum wage, only 10% of actual income is due, also for pension. The important distinction: the 31.07% buys full cover, while the 10% buys pension alone, so sick pay and parental benefit will be lower than for an employee on the same income.
Are social contributions deductible before income tax?
Yes. Contributions a self-employed person makes for themselves are justified expenses, deducted in full from annual taxable income in the annual income declaration. This calculator deducts them before calculating tax, exactly as the declaration does.
Does a self-employed person get the tax-free allowance?
Yes, the same one an employee gets: 570 EUR a month in 2027, or 6,840 EUR a year, plus 250 EUR a month per dependant. The only difference is how it is received. An employee has it applied every month through the payroll book, while a self-employed person claims it in the annual income declaration.
Does the 2027 minimum wage affect the self-employed?
Yes, and this is a real difference from employment. For an employee the minimum wage does not change take-home pay at all, as long as the salary is above it anyway. For a self-employed person the minimum wage is the contribution base, so raising it from 780 to 820 EUR increases the share of income charged at 31.07% rather than 10%. With income of 820 EUR a month or more, contributions rise by 8.43 EUR a month. The tripartite council backed 820 EUR on 8 October; the Cabinet still has to adopt it.
When can the tax authority treat the arrangement as employment?
When it carries the marks of employment: set working hours, subordination to the employer's instructions, a workplace and the employer's equipment, and working for a single client. In that case the State Revenue Service can assess every tax as if it had been employment and add penalties and late-payment interest. Choosing between an employment contract and a contractor arrangement is not a free choice made on tax grounds.
More
Where to go next
Salary calculator 2027
Net pay with the 570 EUR allowance set in law.
What an employee costs
Full employer cost, or budget to salary.
Income and expense journal
The self-employed journal, from your bank statement. Free.
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