The Luxembourg scale, bracket by bracket
Taxable income is cut into brackets, and each bracket carries its own rate. That rate applies only to the slice of income falling inside the bracket, never to the whole amount. In the 2025 scale this calculator uses, the first taxed bracket starts at €13,230. Above that the rates climb in steps from 8% to 42%, the last step starting at €234,870. The income is first rounded down to a multiple of €50, the tax is rounded down to the euro, and a tax under €12 is not due.
Two operations follow the scale. The employment-fund surtax adds 7% to the base tax. Above €150,000 of taxable income in classes 1 and 1a, and €300,000 in class 2, the rate becomes 9%, but only on the part of the tax that comes from the income above that line. Then come the two employee credits, counted per employee. The salary tax credit (CIS) is €300 at €936 of gross salary, rises to €600 at €11,266, stays there up to €40,000, then falls to nothing at €80,000. The CO2 credit is €192 up to €40,000 and also falls to nothing at €80,000.
On €60,000 in class 1, the sequence gives €11,164 of base tax and €781 of employment-fund surtax. The credits take off €300 of CIS and €96 of CO2 credit, which leaves €11,549 of estimated tax. The effective rate lands at 19.2%, the marginal rate at 39%.
Classes 1, 1a and 2
The tax class decides how the scale is applied. Class 1 covers a single person with no children, and the scale applies as it stands. Class 2 covers married or partnered couples taxed jointly: the income is halved, the scale applies to that half, and the resulting tax is doubled. Class 1a covers single parents, widowed taxpayers and people over 64.
Class 1a has a formula of its own. The scale applies to the income minus a quarter of the gap between that income and €79,380, which lightens the tax on modest incomes. From €51,804 the rate on each extra euro is capped at 39%, then follows the scale’s 40, 41 and 42%. At the same income, class 2 pays less than class 1a, which pays less than class 1.
The gap shows on one income. On €60,000 the estimated tax is €11,549 in class 1, €9,066 in class 1a and €3,880 in class 2. The first tax due moves the same way: it appears at €13,400 of income in class 1, €26,600 in class 1a and €26,650 in class 2.
How to use the calculator
Two fields are enough: the annual income and the tax class. The estimated tax, the rate curve and the four figures under the chart are recomputed on every keystroke.
The amount entered is treated as taxable income. A real statement starts from a contractual gross, minus social contributions, then minus the lump sums and deductions claimed on the return. Someone entering their contractual gross here therefore reads a tax above their own.
Both settings fit in the page address. The Copy link button returns a URL that reopens the same situation, income and class included.
- Annual income: the amount the scale is applied to, from €0 to €1,000,000.
- Tax class: 1, 1a or 2, which sets how the scale is applied.
- Employment-fund surtax and employee tax credits: computed from the income, not entered.
Reading the result
The big number is the estimated annual tax. The two swatches above the chart carry the two rates: the marginal one, from the highest bracket reached, and the effective one, total tax over income. The four boxes under the chart break the calculation open, from net after tax to the employee tax credits.
The two rates answer different questions. On €60,000 in class 1 the effective rate is 19.2% and the marginal rate 39%. The first measures what is paid, the second what the next slice of the scale costs. Moving from €60,000 to €61,000 takes the estimated tax from €11,549 to €11,985.80, so €436.80 for €1,000 more. That is above the marginal rate: the scale adds €390, the employment-fund surtax €27, and the two credits shrink by €19.80 over the same slice.
The curve shows both rates across the whole income range. The marginal rate climbs in steps, one per bracket crossed. The effective rate climbs gently and always stays below it, since it averages every bracket already passed.
Frequently asked questions
How is Luxembourg income tax calculated?
Taxable income is cut into brackets, each taxed at its own rate. In the 2025 scale used here, the first taxed bracket starts at €13,230 and the rates run from 8% to 42%. The employment-fund surtax then adds 7% of the base tax, and 9% on the part of the tax that comes from income above €150,000 in classes 1 and 1a or €300,000 in class 2. The CIS and the CO2 credit are subtracted last. On €60,000 in class 1 the estimated total is €11,549.
What is the difference between classes 1, 1a and 2?
Class 1 covers a single person with no children, class 2 couples taxed jointly, class 1a single parents, widowed taxpayers and people over 64. Class 2 halves the income before applying the scale, which lowers the average rate. On €60,000 the estimated tax is €11,549 in class 1, €9,066 in class 1a and €3,880 in class 2.
Does a cross-border worker pay Luxembourg tax?
A salary paid by a Luxembourg employer is taxed in Luxembourg, whether the employee lives in Luxembourg, Belgium or France. This calculator works out that Luxembourg share only. Re-taxation of the income by the country of residence is not modelled: the engine places it outside its current scope, which covers Luxembourg employment and residence in LU, BE or FR.
Why does the estimate differ from the tax actually due?
For three reasons. The amount entered is treated as taxable income, while a real statement starts from gross minus social contributions and deductions. The same amount stands in for the gross salary of a single employee when the credits are worked out. And the result follows the 2025 rules, the year the tool is set to: another year can have another scale. The result is an estimate, not the amount on your assessment.
What is the difference between the effective and the marginal rate?
The marginal rate comes from the highest bracket reached, so it is the rate on the next euro earned. The effective rate is total tax divided by income. On €60,000 in class 1 they are 39% and 19.2%. The marginal rate says what a deduction is worth, the effective rate says what share of the income goes to tax.
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