Luxembourg Tax Calculator (2026)
Income tax rates and take-home pay for Luxembourg
Luxembourg Income Tax Brackets (2025)
| Bracket | Income Range | Rate |
|---|---|---|
| Zero rate | €0 - €13,230 | 0.0% |
| 8% | €13,230 - €15,435 | 8.0% |
| 9% | €15,435 - €17,640 | 9.0% |
| 10% | €17,640 - €19,845 | 10.0% |
| 11% | €19,845 - €22,050 | 11.0% |
| 12% | €22,050 - €24,255 | 12.0% |
| 14% | €24,255 - €26,550 | 14.0% |
| 16% | €26,550 - €28,845 | 16.0% |
| 18% | €28,845 - €31,140 | 18.0% |
| 20% | €31,140 - €33,435 | 20.0% |
| 22% | €33,435 - €35,730 | 22.0% |
| 24% | €35,730 - €38,025 | 24.0% |
| 26% | €38,025 - €40,320 | 26.0% |
| 28% | €40,320 - €42,615 | 28.0% |
| 30% | €42,615 - €44,910 | 30.0% |
| 32% | €44,910 - €47,205 | 32.0% |
| 34% | €47,205 - €49,500 | 34.0% |
| 36% | €49,500 - €51,795 | 36.0% |
| 38% | €51,795 - €54,090 | 38.0% |
| 39% | €54,090 - €117,450 | 39.0% |
| 40% | €117,450 - €176,160 | 40.0% |
| 41% | €176,160 - €234,870 | 41.0% |
| 42% | €234,870+ | 42.0% |
Sickness insurance
| Bracket | Income Range | Rate |
|---|---|---|
| 2.8% | €0+ | 2.8% |
Capped at €4,545 per year
Pension insurance
| Bracket | Income Range | Rate |
|---|---|---|
| 8% | €0+ | 8.0% |
Capped at €10,814 per year
Dependency contribution
| Bracket | Income Range | Rate |
|---|---|---|
| 1.4% | €8,045+ | 1.4% |
Solidarity tax
| Bracket | Income Range | Rate |
|---|---|---|
| 7% solidarity surcharge | €0+ | 7.0% |
Key Facts
Tax Year
2025
Currency
EUR
Top Rate
42.0%
Brackets
23 brackets
Tax-Free Threshold
€13,230
Social Contributions
3 items
Assumptions
- · Model uses Tax Class 1 (single person) as default representative employee.
- · Solidarity tax of 7% applied to income tax liability (standard rate for incomes up to EUR 150,000).
- · Employee tax credit modeled as tiered credit phasing from EUR 600 at low income to EUR 0 at higher income.
- · Social security contributions (sickness 2.80%, pension 8%) are deductible from gross income before income tax calculation.
- · Dependency contribution (1.4%) applied to gross income reduced by EUR 8,045.32 annual ceiling (EUR 675.94/month).
- · Minimum standard employment deduction of EUR 540 included in income-based deductions.
- · Commuting expense deduction limited to EUR 2,574 per year; modeled as percentage of income with maximum cap.
- · Life/disability insurance and loan interest deduction of EUR 672 per year included as flat standard deduction.
- · Employee contributions to employer pension schemes up to EUR 1,200/year are tax-deductible.
- · CISSM (minimum wage credit) not modeled as it applies only to gross monthly salary EUR 1,800–EUR 3,600; falls outside typical salary-comparison use case.
- · CO2 tax credit of EUR 192 per year included as flat credit.
- · Personal allowance for jointly taxable spouses (EUR 4,500) not applicable to single default person.
- · Non-resident rules and extraordinary charges deductions excluded as outside default resident employee scope.
- · Tax brackets simplified from index-adjusted 2025 scale; rates applied progressively.
- · All figures reflect 2025 tax year indexation.
Frequently asked questions
How many income tax brackets does Luxembourg have?
Luxembourg has 23 progressive income tax brackets, ranging from 0% on the first EUR 13,230 of income to 42% on income above EUR 234,870. This progressive system means you only pay higher rates on income that falls into each bracket, not your entire salary.
What are the main deductions available to employees in Luxembourg?
Employees can deduct several items from their taxable income, including a EUR 540 employment expenses standard deduction, up to EUR 2,574 in commuting expenses, and EUR 672 for life/disability insurance and loan interest. Additionally, sickness insurance (2.8%) and pension contributions (8%) are deductible from gross income before tax is calculated.
Do I pay social security contributions in Luxembourg?
Yes, employees pay three main social contributions: 2.8% for sickness insurance, 8% for pension insurance, and 1.4% dependency contribution (applied to income above EUR 8,045.32 annually). Both sickness and pension contributions are deductible from your gross income for income tax purposes, reducing your overall tax burden.
What tax credits can I claim as an employee in Luxembourg?
You can claim an employee tax credit of up to EUR 600 if your income is below EUR 30,000, which gradually phases out as income increases above EUR 30,000 and reaches zero at EUR 50,000. Additionally, all residents receive a CO2 tax credit of EUR 192 per year, and a 7% solidarity surcharge applies to your total income tax liability.
Is Luxembourg a good tax destination for remote workers and expats?
Luxembourg offers a relatively favorable tax environment with a zero tax rate on the first EUR 13,230 of income, generous standard deductions, and refundable tax credits that can reduce your overall tax burden significantly. However, the progressive tax system reaches 42% at higher income levels, and you should verify your residency status and any special tax regimes that may apply to your situation.
Other tax calculators
Compare Luxembourg with another country
See side-by-side tax breakdowns for any two countries