Self-Employed Tax in Luxembourg (2026): Bareme Plus Full Contributions
A Luxembourg self-employed person (independant) pays income tax on the same 0-42% bareme plus 7% solidarity surcharge as employees, applied to business profit. The key difference is social security: they pay both the employee and employer shares, so the combined contribution rate is roughly 24-25% of income within the ceiling. Verify with the CCSS and ACD.
Income tax on business profit
Self-employed income is taxed on the same class-based bareme as salaries, applied to net business profit (revenue minus deductible business expenses). The tax class (1, 1a or 2) and the 7% solidarity surcharge apply just as for employees. Profit is assessed on the annual return, with quarterly advance payments (avances) set by the ACD based on the previous year. Keeping proper accounts is essential because, unlike employees, the self-employed cannot rely on a simple flat expense allowance for most costs.
Full social contributions
The decisive difference from employment is that a self-employed person pays both halves of the social contributions -- the employee share and the employer share -- because there is no separate employer. That means pension at roughly 16% (both halves), health around 5.6-6.1% (both halves), plus the 1.4% dependance, for a combined contribution burden of about 24-25% of income up to the ceiling of EUR 13,518.68 per month. A minimum contribution applies based on the minimum social wage even when profit is low. Confirm the current split with the CCSS.
FAQ
How are the self-employed taxed in Luxembourg?
On the same 0-42% bareme plus 7% solidarity surcharge as employees, applied to net business profit, using their tax class. Tax is paid via quarterly advances and reconciled annually. Verify with the ACD.
Why do the self-employed pay more in contributions?
Because they pay both the employee and employer social shares themselves -- roughly 24-25% combined (pension, health and dependance) up to the ceiling -- with a minimum contribution based on the minimum social wage. Confirm the current rates with the CCSS.
⚠️ Informational estimate, not tax advice. Payroll software may differ in edge cases. Verify with a professional.