There are no household brackets: there are three classes
Luxembourg has a single scale — 23 brackets, from 0 % to 42 % — and what changes with your situation is not the table but how it is applied to you. Hence the three classes.
Class 1 uses the scale directly. Class 2 does pure splitting: halve the income, apply the table, multiply by two. And class 1a is the odd one: it stretches the scale by 25 % with the rate frozen at 39 %, which is NOT the «half splitting» usually described. No secondary source gets that rule right; it was derived by checking against the official calculator.
The employment fund surcharge is marginal, not global
On top of the tax you pay a 7 % surcharge on the amount due, rising to 9 % above a certain income. And here is the detail almost every calculator gets wrong: that 9 % does NOT apply to the whole bill, only to the part arising from income above the threshold.
The difference between applying it globally and marginally is hundreds of euros as soon as you cross the threshold. It is one of the two rules the cross-check against the official source made it possible to derive, and it was not written down anywhere legible.
The credits fade out, and the dependency contribution is not deductible
As in Ireland, credits do not reduce the base: they are subtracted from the tax due. There are four, and three of them fade out as income rises. In the band where those three tapers overlap, the real marginal rate shoots well above the scale's nominal one.
And the dependency contribution is the oddity of the Luxembourg system: it has no ceiling, it has an allowance, and — unlike the pension and sickness ones — it is NOT deductible from tax. That last part was confirmed by the official payslip example, not by reading the law.
Where these figures come from, and the two anchors
The scale is the one in article 118 of the LIR. It is the same as 2025's: the reform of the law of 20 December 2024 adjusted it by 2.5 index brackets and the next adjustment does not arrive until 2027, so the table holds for both years.
The machinery that produces the tax due is checked against the official calculator of the Administration des contributions directes. It takes an adjusted taxable income and a class, and returns the tax, the employment fund and the total: exactly the boundary we want to verify. That is 45 checkpoints, all to the euro, across the three classes.
That check did not just validate the scale: it derived both rules described above. And because the official calculator is handed the base already computed, a second anchor was needed for whatever decides the base: the payslip example published by the ACD itself — 3,500 € gross a month in class 2, with 63.80 € withheld — is reproduced here to the cent. That confirms in one go that pension and sickness contributions are deducted but the dependency one is not, that the flat-rate expenses allowance is 540 €, and that the special expenses minimum is not added on top.
What this calculator does not include
- The frais de déplacement, which depend on the distance between home and work. Anyone living far away will pay considerably less than shown here.
- Actual professional expenses above the 540 € flat rate.
- Voluntary deductions: old-age provision, home savings, insurance, loan interest and donations.
- Charges extraordinaires and the tax moderation for children not living in the household.
- That the credits are REFUNDABLE: when they exceed the tax due, Luxembourg pays the difference back. Here the tax simply stops at zero, as in Ireland. It only makes a difference on low incomes in class 1a, where the single-parent tax credit can exceed the bill by a wide margin.
- That class 1a also covers widowed people and those over 64; here it is only reached through the single-parent route.
Last updated: October 8, 2026