- Gross Income
- is the sum of all your earnings before any taxes have been deducted, minus any exemptions.
- Net Income
- is the money you take home after all taxes and contributions have been deducted from your gross salary.
- Tax due
- is the sum of all taxes and contributions that will be deducted from your gross salary. The deductions used in the above salary calculator assume you are not married and you have no dependents.
- Income Tax
- is a progressive tax that ranges from 0% to 40%. The first 11,265 EUR of your salary are not taxed. The Employment Fund surcharge increases the income tax to 7% for earnings not exceeding 150,000 EUR or to 9% if the income is above the threshold. The calculation of the income taxes depends on the taxable income and the individual's family status.
- Social Security Contributions
- is computed on an employee's yearly gross salary. The employer withholds employee's social security contributions at source and remits the total contributions to the social security authorities. The social security contributions include:
- Pension - 8% of the total income and is capped at 115K EUR per annum.
- Health care - 3.05% of the total income and is capped at 115K EUR per annum.
- Dependence - 1.4% of the total income and it is not capped. The first 5,995 EUR are not taxed.
- Budget Balance (temporary tax)
- is a temporary tax to balance the state budget has been introduced from 2015. It represents 0.5% of the total earnings minus the minimum income (1,922 EUR per month).
The information presented on this page is based on the fiscal regulations of Luxembourg in 2019. Visit impotsdirects.public.lu for more details.
The average monthly net salary in Luxembourg (LU) is around 3 367 EUR, with a minimum income of 1 922 EUR per month. This places Luxembourg on the 1st place in the International Labour Organisation statistics for 2012.
In Luxembourg, the income is subject to a pay-as-you-earn (PAYE) system. The taxes (social security contributions and income tax) are deducted monthly from the gross salary by the employers on behalf of the employees. The calculation of income taxes depends on the taxable income and the individual's family status.
Luxembourg is considered a tax haven country, this being the reason why many foreign corporations have headquarters there. The tax system in Luxembourg allows these companies to cut billions from tax bills and it charges them a very low tax rate to send money into and out of the country.
Luxembourg is the ninth-least-corrupt country in the world. Its capital, LU City, is one of the three official capitals of the European Union. It is a friendly and multilingual country with over 200K immigrants, or about 44.5% of its population.