DoubleTaxationTaxes on salary: Luxembourg preliminary data
How much income tax and social contributions are paid on a salary in Luxembourg, what a sole proprietor and a company pay, and which special regimes exist. Preliminary data.
Preliminary data: headline rates from official sources and bulletins of international organisations, without reliefs or special rules; being refined.
Calculation for a gross salary of €60,000 per year
| Gross salary | €60,001 |
|---|---|
| Income tax | €8,262 |
| Employee contributions | €7,770 |
| Take-home pay | €43,968 |
| Employer contributions and payroll taxes | €7,542 |
| Employer's labour cost | €67,543 |
Only some of the country's direct taxes and levies are counted: income tax on wages and compulsory contributions. Not counted: property and real-estate taxes; taxes on dividends, interest and other investment income; inheritance and gift taxes; indirect taxes such as VAT, excise and customs duties.
Taxes for sole proprietors and companies
Tax and contributions on the profit for a year; expenses are 10% of revenue, the company pays its profit out to the owner. Reliefs and local taxes are not included.
| Annual revenue | €30,000 | €60,000 | €120,000 |
|---|---|---|---|
| Sole proprietor | €6,791 25.2 % | €17,563 32.5 % | €47,604 44.1 % |
| Company | €5,867 21.7 % | €11,734 21.7 % | €23,469 21.7 % |
Special tax regimes
Régime des impatriés (art. 115 n° 13b L.I.R.)
For people relocating
Who: Employees hired abroad or seconded to Luxembourg, not Luxembourg-taxed nor living within 150 km of the border in the prior 5 years, fixed pay at least EUR 75,000.
50% of gross annual pay (capped at EUR 400,000) exempt from income tax, for up to 8 years.
Legal basis: L.I.R. art. 115 n° 13b
Prime jeune salarié (art. 115 n° 13d L.I.R.)
For employees
Who: Employees under 30 on their first permanent contract, for up to 5 years with the same employer.
75% of an annual employer bonus exempt, bonus capped at EUR 5,000 / 3,750 / 2,500 by pay band (none above EUR 100,000 gross).
Legal basis: L.I.R. art. 115 n° 13d
Prime participative (art. 115 n° 13a L.I.R.)
For employees
Who: Employees affiliated to Luxembourg (or treaty-covered) social security whose employer has commercial, agricultural or professional income and keeps regular accounts.
50% of a profit-sharing bonus exempt from income tax, the exempt part limited to 30% of the employee's gross annual pay; the employer's total bonus pool may not exceed 7.5% of the prior year's profit.
Legal basis: L.I.R. art. 115 n° 13a
Tax residence
The tax residence check does not cover Luxembourg yet.
Assumptions
- Calculated with the OECD Taxing Wages methodology: income tax including local taxes plus employee social security; single person without children, tax year 2026, ECB rate of 2 January 2026.
- Exchange rate: 1 EUR = 1.000012 EUR (ECB euro reference rate, 02/01/2026) ↗
Sources
- ACD — Barèmes (scale in force since tax year 2025)
- ACD — L.I.R. texte coordonné en vigueur au 1er janvier 2026 (art. 115, 118, 154quater, 174)
- ACD — Barème 2025 format Excel (employment-fund surcharge 7% / 9%)
- CCSS — Paramètres sociaux: taux de cotisation 2026, maximum cotisable
- IGSS — Paramètres sociaux valables au 1er janvier 2026
- OECD Corporate Tax Statistics — combined statutory CIT rate 2026 (Luxembourg City)
Data checked: 08/11/2026. An indicative calculation for a typical case. Not tax advice.