Luxembourg income tax brackets in 2026

Luxembourg income tax is progressive: a marginal rate applies only to the part of adjusted taxable income within a bracket, not to the whole income. The 2026 page uses the tariff in force and does not treat a pending bill as adopted law. ^{[1] [2]}

2026 base tariff

The annual class 1 base tariff begins as follows and ultimately reaches a 42% marginal rate above €234,870. ^[3]

The table describes marginal brackets. Deductions and allowances determine adjusted taxable income before the tariff is applied. ^[4]

Employment Fund surcharge

The calculated income tax is increased for the Employment Fund. The surcharge is 7% up to €150,000 of adjusted taxable income for classes 1 and 1a, or €300,000 for class 2, and 9% above the corresponding threshold. ^[5]

Tax classes

Class 1 is the residual class for residents who are not in class 1a or 2. Class 1a applies to defined situations, including certain widowed taxpayers, people qualifying for child-related relief and people over 64 at the start of the tax year. ^[6]

Class 2 generally concerns joint taxation and uses income splitting: tax is twice the class 1 amount calculated on half of adjusted taxable income. Non-resident access depends on the relevant conditions and is not automatic. ^{[7] [8]}

Annual tariff versus payroll withholding

The annual tariff is not interchangeable with the monthly salary withholding scale. Payroll uses semi-net remuneration, payroll-specific deductions, periodicity and rounding. A separately paid bonus can use the non-periodic scale. ^[9]

For a salary estimate, use the Luxembourg gross-to-net calculator. For the payroll mechanism, read salary withholding tax.