Getting married to save on taxes in Luxembourg: good idea or not?

Getting married to pay less tax in Luxembourg? Find out how tax classes work and when marriage or a PACS actually saves you money.

Marriage is usually seen as a personal decision… but in Luxembourg, it can also make a real difference to your tax bill. That's because your tax class depends on your family situation, and tying the knot might mean paying less. But does it always work out that way?

1. How tax classes work in Luxembourg

• Class 1: single, no children.
• Class 1a: single parents or widowed with dependent children.
• Class 2: married couples or registered partners (conditions apply).

Class 2 is the sweet spot, it lets you file jointly, which usually means a lower average tax rate.

2. What's in it for you, tax-wise?

• Joint taxation: your incomes are added together, then split in half for the tax calculation. If one of you earns a lot more, this evens things out and lowers the overall rate.
• Pooled deductions: some deductible expenses (loan interest, life insurance, home savings…) go further when you're a couple.
• Extra-professional allowance: married couples get a €4,500 deduction on top.

Quick example: say one partner earns €90,000 and the other €10,000. In Class 1, you'd each be taxed separately, ouch for the higher earner. In Class 2, the tax is based on €50,000 each, which brings the total bill down nicely.

3. When marriage won't move the needle

• If you both earn roughly the same, the tax benefit shrinks.
• For cross-border workers, getting Class 2 depends on meeting the assimilation rules (at least 90% of your income taxable in Luxembourg, or no more than €13,000 in foreign taxable income).

4. What about a PACS?

Registered partners (PACS) can also get Class 2, but only if the PACS was signed before 1 January of the tax year. So it's a valid alternative to marriage with the same tax perks.

Quick example: if you register your PACS on 5 January 2024, you won't get Class 2 or be able to file jointly for 2024. You'll have to wait until the following year, so for your 2025 return.

5. So… should you get married just for the tax break?

Marriage can definitely save you money, especially if there's a big income gap between you. But it's not a sure thing, and let's be honest, it should be a personal decision first.

Want to see if you'd actually benefit? Run a free simulation on taxx.lu and find out.

💡 Tip: before you say "I do" for tax reasons, compare what you'd pay in Class 1 versus Class 2 with your actual incomes.