Luxembourg Tax Calculator (2026)
Income tax rates and take-home pay for Luxembourg
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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 up to 42% on income above EUR 234,870. The tax system is highly progressive, with rates increasing gradually as your income rises, so you only pay higher rates on income that falls into each bracket.
What social security contributions do I pay as an employee in Luxembourg?
As an employee, you contribute 2.8% for sickness insurance, 8% for pension insurance, and 1.4% for dependency contribution (applied to income above EUR 8,045.32 annually). Both sickness and pension contributions are deductible from your gross income before income tax is calculated, which reduces your overall tax burden.
Are there any tax credits available to help lower my tax bill?
Yes, Luxembourg offers an employee tax credit of up to EUR 600 for lower-income earners that gradually phases out as income increases, plus a CO2 tax credit of EUR 192 per year. Additionally, you can claim standard deductions for employment expenses (EUR 540), commuting costs (up to EUR 2,574), and life/disability insurance (EUR 672).
What is the solidarity tax in Luxembourg?
Luxembourg applies a 7% solidarity surcharge on top of your income tax liability, which means your effective tax rate is about 7% higher than the bracket rate alone. This surcharge applies to all income levels and is calculated on your total income tax before any final credits are applied.
How much can I deduct for commuting expenses?
You can claim a standard deduction of up to EUR 2,574 per year for commuting expenses, which is subtracted from your taxable income before income tax is calculated. This helps offset the cost of traveling to and from work in Luxembourg.
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