The payroll tax book (algas nodokļa grāmatiņa) is a Latvian electronic record in VID's EDS system that tells an employer whether to apply the €550 tax-free allowance and dependant relief in 2026. Only one employer at a time.
The payroll tax book is an electronic record inside the Electronic Declaration System (EDS) run by the State Revenue Service (VID) of Latvia. There is no paper version: the employee opens it by logging into EDS and marks there which employer is their main place of income.
The book itself calculates nothing. It is the confirmation an employer needs before it can take reliefs into account in payroll: the tax-free allowance, dependant relief, pensioner status and any other entries registered in the book. The employer reads this from VID's system rather than from a document handed over by the employee.
When the book is filed with an employer, that employer deducts the tax-free allowance of €550 per month and €250 for each dependant before income tax is worked out (VID, verified 13 August 2026). For a person of state pension age the allowance is €1,000 per month.
The order of the 2026 calculation is: mandatory state social insurance contributions of 10.5% come off the gross first, the tax-free allowance and dependant relief are then subtracted from what remains, and the income tax rate of 25.5% is applied only to the balance (VID, verified 13 August 2026). A full €550 allowance therefore reduces monthly tax by €140.25, which is 25.5% of 550.
This gap is exactly what the "tax book filed" toggle switches in the salary calculator. On a gross salary of €1,750 per month with no dependants, for someone below state pension age with the book filed, take-home pay is €1,307.11 per month. Using the same rates but with no book filed, the allowance is not applied and the result is €1,166.86 — €140.25 less every month.
An allowance that was not applied is not lost. It is taken into account in the annual income declaration filed the following year, and overpaid tax is refunded. Filing the book changes when the money reaches the employee, not the total tax due for the year.
The book can be filed with only one employer at a time — the one that is the main place of income. Where there are several employers, the others withhold without any allowance: 10.5% social contributions from the gross, then 25.5% income tax on what remains (VID, verified 13 August 2026). When changing jobs, the entry in the book has to be moved to the new employer.
The final reckoning happens in the annual income declaration. It adds up the year's income, applies the allowance for the whole year and sets the progressive rate: 25.5% up to €105,300 a year and 33% above that (VID, verified 13 August 2026). The 33% rate never appears in a monthly payslip. This page does not give tax advice — it explains published rates and how they are applied.
The payroll tax book is an electronic document in EDS, the declaration system of Latvia's State Revenue Service (VID), which in 2026 shows an employer which reliefs may be applied to a salary. With the book filed, the employer applies a tax-free allowance of €550 per month and €250 for each dependant. There is no paper version. Source: VID, verified 13 August 2026.
In 2026 the tax book exists only electronically, inside EDS, the declaration system of Latvia's State Revenue Service (VID). It shows which employer the book is filed with and which reliefs are registered in it, including the €550 monthly allowance and €250 per dependant. Source: VID, verified 13 August 2026.
Filing is done electronically: the employee logs into VID's EDS system and marks the employer as their main place of income. The employer sees that entry in its own VID account, and nothing is handed over on paper. From then on payroll applies the €550 monthly tax-free allowance. Source: VID, verified 13 August 2026.
With no book filed, the employer applies neither the tax-free allowance nor dependant relief: in 2026 it withholds 10.5% social contributions and 25.5% income tax with no deductions. For someone entitled to the full €550, take-home pay is €140.25 a month lower, and the difference is recovered through the annual income declaration. Source: VID, verified 13 August 2026.
No. The book can be filed with only one employer at a time, the main place of income. A second employer in 2026 withholds 10.5% social contributions and 25.5% income tax with no €550 allowance. The total for the year is settled in the annual income declaration. Source: VID, verified 13 August 2026.
In 2026, with the book filed, an employer applies a tax-free allowance of €550 per month, €250 per month for each dependant and €1,000 per month for a person of state pension age. These amounts are deducted from income before the 25.5% income tax is calculated. Source: VID, verified 13 August 2026.
No. Mandatory state social insurance contributions in 2026 are withheld from gross pay regardless of the book: 10.5% from the employee and 23.59% paid by the employer; at state pension age, 9.25% and 20.77%. The book affects income tax only. Source: VID, verified 13 August 2026.