Publié le 04 March 2025

Luxembourg income tax rates from 2024: Everything you need to know

Luxembourg applies a progressive tax system: the more you earn, the higher your rate. Find out about the 2024 tax brackets and learn how to optimize your taxes.

In Luxembourg, income tax is calculated using a progressive tax system, meaning that tax rates increase as income levels rise. Below, you'll find the 2024 tax brackets, along with explanations on how income tax is calculated and ways to optimize your taxation.

2024 Luxembourg income tax brackets

The Luxembourg tax system applies different tax rates to different income brackets. Here are the 2024 income tax rates for Tax class 1:

Income tax brackets 2024

Here are the 2017 to 2023 income tax rates for Tax class 1:

Income tax brackets 2017-2023

How is income tax calculated in Luxembourg?

Luxembourg uses a progressive taxation system, meaning not all your income is taxed at the same rate. Instead, different portions of your income fall into different tax brackets, with each portion taxed at the corresponding rate.

Example tax calculation for a taxable income of €30,000:

0% on the first €12,438
8% on the portion €12,438 – €14,508
9% on the portion €14,508 – €16,578
10% on the portion €16,578 – €18,648
And so on...

The total tax amount is the sum of the taxed portions in each bracket.

How to reduce your taxes in Luxembourg?

There are several ways to optimize your taxation in Luxembourg:

Deductible expenses – Loan interest, insurance premiums, professional training costs.
Retirement savings plans – Contributions to pension schemes are tax-deductible.
Charitable donations – Donations to approved organizations can lower your tax bill.
Joint taxation – Married couples may benefit from Tax Class 2, which can be more favorable.

Key takeaways

Luxembourg applies a progressive tax system, meaning different parts of your income are taxed at different rates.
Tax rates range from 0% to 42%, depending on income brackets.
Tax optimization strategies can help reduce your tax burden, including deductible expenses and pension savings.

To ensure compliance and optimize your tax situation, test taxx.lu today.