Social Security Contributions — Luxembourg
Luxembourg's social security system covers pension, healthcare, long-term care, and unemployment insurance. Combined employee and employer contributions roughly 27% of gross salary.
Social Security Contributions
Luxembourg's social security system covers pension, healthcare, long-term care, and unemployment insurance. Combined employee and employer contributions roughly 27% of gross salary.
Employee Contributions 2026
Pension insurance 8.5%, Health insurance 3.05% (2.8% + 0.25% cash benefits), Long-term care insurance 1.4%. No employee unemployment contribution. Automatically deducted from gross salary by employer.
Maximum annual salary subject to pension and health contributions: €164,589.81 (5× the social minimum wage). Long-term care contribution has no ceiling - calculated on total salary after an allowance of a quarter of the minimum wage.
Minimum wage €2,743.16/month (unskilled worker over 18). Contributions calculated on at least this amount for full-time employment.
Employer Contributions
Pension 8%, Health 3.05%, Long-term care 1.4%, Accident insurance varies, Mutual insurance fund 0.49%, Unemployment 1.3%. Total varies slightly by sector.
Employee 12.95% plus employer ~14.24% equals roughly 27% combined social security burden on gross salary.
Self-Employed Contributions
Self-employed pay both employee and employer portions. Pension 16%, Health 6.1%, Long-term care 2.8%, Maternity 1.74%, Accident insurance 0.16%.
Contributions calculated on net professional income. Minimum contribution base and ceilings apply similar to employees.
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Personal Income Tax 2026
Progressive tax system with rates from 0% to 42%. Tax credits and allowances significantly reduce effective tax burden. Solidarity surcharge 7-9% applies on tax amounts for higher earners.
03Investment and Capital Income
Dividends taxed at 21%, capital gains treatment depends on holding period and nature. Cryptocurrency gains tax-free if held over 6 months. Participation exemption for qualifying shareholdings.
04Business Taxation
Corporate income tax 17% plus solidarity surcharge and municipal business tax. Effective combined rate 24-26% depending on municipality. Favorable IP regime and holding company structures.