Personal Income Tax 2026 — Luxembourg

First €13,230 of annual income tax-free for everyone. Includes employment income, business income, pensions, and other taxable income.

8% to 12% in €2,205 steps (€13,230-€24,255), then 14% to 38% in €2,295 steps up to €54,090, then 39% up to €117,450. Gradual progression.

Income exceeding €234,870 taxed at 42% (40% from €117,450, 41% from €176,160). One of Europe's highest thresholds for top rate. Additional solidarity surcharge applies.

Automatic credit for employed persons: €600 for gross salary between €11,265 and €40,000, phasing out above. Plus CO2 credit up to €216. Applied after calculating tax on taxable income.

For employees earning €1,800-€3,000 gross per month, phasing out to zero at €3,600. Combined with the employee credit it significantly reduces tax for modest incomes.

Single individuals living alone receive €4,500 allowance. Married couples receive €9,000. Reduces taxable income.

7% surcharge on the income tax of all taxpayers. Applied to tax amount, not income.

9% surcharge when taxable income exceeds €150,000 (Class 1) or €300,000 (Class 2). Increases effective tax rate for high earners.

Default for unmarried individuals without children. Standard allowances and brackets apply.

Joint taxation option. Brackets effectively doubled. More favorable for couples with income disparity. Can save significant tax.

For single parents with dependent children. Additional allowances. More favorable than standard Class 1.