How Income Tax Works in Luxembourg (2026): The Bareme and Tax Classes
Luxembourg taxes income on a finely graduated bareme running from 0% to a top marginal 42% across 23 brackets, plus a solidarity surcharge of 7% (9% above EUR 150,000 taxable). Your tax class -- 1 for single people, 1a for single parents and older taxpayers, 2 for jointly taxed couples -- strongly affects the result. Verify with the ACD (impotsdirects.public.lu).
The bareme (tax scale)
Luxembourg uses one of the most finely graduated income-tax scales in Europe: 23 brackets rising smoothly from 0% to a top marginal rate of 42%. There is no single flat threshold -- the rate steps up gradually, so effective rates climb slowly. This calculator applies the class 1 scale (single taxpayer). Because the 2026 bareme was not fully published at the time of writing, the calculator applies the 2025 scale as a provisional estimate; treat the figures as indicative and confirm with the ACD.
Tax classes and the solidarity surcharge
Luxembourg assigns each taxpayer a class: class 1 for single people without children, class 1a for single parents, widowers and those over 64, and class 2 for married or partnered couples taxed jointly (and typically the most favourable). The class changes the bracket thresholds, so two people with the same salary can pay very different tax. On top of the basic tax, a solidarity surcharge (contribution au fonds pour l'emploi) of 7% is added -- rising to 9% on taxable income above EUR 150,000. A standard EUR 540/year expenses allowance (forfait frais) is deducted before tax.
Worked example
Illustration only, class 1, 2025 scale applied provisionally -- confirm with the ACD. Monthly gross EUR 5,000 (EUR 60,000/year), single: Social contributions (pension 8.5% + maladie 3.05% + dependance 1.4%) are deducted, and the EUR 540 forfait applies. Income tax on the class 1 bareme plus the 7% solidarity surcharge leaves a net of approximately EUR 3,651 per month. A class 2 taxpayer on the same salary would keep noticeably more, because the joint scale is more generous.
FAQ
What is Luxembourg's top income-tax rate?
The top marginal rate is 42%, reached through a 23-bracket bareme, plus a solidarity surcharge of 7% (9% above EUR 150,000 taxable). The scale is finely graduated, so effective rates rise gradually. Verify with the ACD.
What are tax classes 1, 1a and 2?
Class 1 is for single people without children, class 1a for single parents, widowers and those over 64, and class 2 for jointly taxed couples (usually the most favourable). Your class changes the bracket thresholds. This calculator models class 1. Confirm your class with the ACD.
Are the 2026 figures final?
Not entirely. At the time of writing the 2026 bareme was not fully published, so the calculator applies the 2025 scale as a provisional estimate. Treat the income-tax figures as indicative and confirm the current bareme with the ACD (impotsdirects.public.lu).
⚠️ Informational estimate, not tax advice. Payroll software may differ in edge cases. Verify with a professional.