Posted on
Started your first job in Luxembourg? Here's how to get a tax refund
Started your first job in Luxembourg in 2025? You likely overpaid tax. Find out how to claim a refund by filing your tax return.
Starting your first job after finishing your studies is exciting. But here's something most new employees don't realise: you've probably paid too much tax. Filing a tax return for your first working year can get you a significant refund, sometimes hundreds of euros.
If you entered the workforce partway through 2025 and earned your first salary, submitting a tax return is almost certainly worth it, especially if you're single and filing individually.
Why job starters overpay tax
In Luxembourg, your employer deducts income tax directly from your salary each month. This is called withholding tax (retenue d'impôt). The system assumes you've been earning the same salary for the entire calendar year.
But that's not your reality. If you started working in September, you only earned a salary for four months, not twelve. During the months before your first job, you had no taxable income at all.
The result? The tax deducted from your payslips is based on a higher annual income than you actually earned. You've overpaid.
How it works
The withholding tax system calculates your monthly deduction as if your salary applies to the full year. When you only work part of the year, your actual annual income is much lower, meaning the tax rate applied was too high.
By filing a tax return, the tax authorities (ACD) recalculate your taxes based on what you actually earned. The difference comes back to you as a refund.
Tax refund for a first job: a practical example
Kim finished her studies in August 2025 and started her first job in Luxembourg in September 2025 with a gross monthly salary of 4,500€.
- Months worked in 2025: 4 (September to December)
- Actual gross annual income: 18,000€
- Income assumed by the withholding system: 54,000€ (4,500€ x 12 months)
Kim's employer withheld tax each month as though she earned 54,000€ for the year. But her real income was only 18,000€, which falls into a much lower tax bracket. By filing her 2025 tax return in 2026, Kim recovers the excess tax and receives a refund.
Don't forget your deductions
On top of the refund from overpaid withholding tax, you can also claim deductions that further reduce your taxable income. These include insurance premiums and interest on personal loans. Every deduction increases your refund.
Form 100 or Form 163: which one do you need?
This depends on your situation. Luxembourg has two main tax forms for individuals:
Form 163 (annual adjustment) is a simplified 6-page form. It's specifically designed for cases like yours: you started working mid-year, you're not required to file a full return, and you want to reclaim overpaid tax. This form cannot result in you owing more tax, it can only lead to a refund or a zero result.
Form 100 (tax return) is the full 20-page tax return. You'll need this if your taxable income exceeds 100,000€, if you earn more than 36,000€ with multiple employers (class 1 or 2), or if you have income not subject to withholding tax (rental income, freelance work, etc.).
For most job starters with a single employer and a straightforward situation, Form 163 is the right choice.
Not sure which form to use?
taxx.lu automatically determines whether you need Form 100 or Form 163 based on your income and personal situation. No guesswork needed.
Who can benefit from this?
This tax advantage mainly applies to:
- Job starters entering the workforce for the first time
- Single taxpayers in tax class 1 or 1a
- Anyone who earned no income for part of the year
It works for both residents and cross-border workers (frontaliers) from France, Belgium, and Germany. If you're a non-resident who worked in Luxembourg for fewer than 9 consecutive months in 2025, Form 163 NR is the version for you.
Not only for job starters
Even if you didn't just start your first job, filing a tax return is worth it for most people in Luxembourg. The withholding tax deducted from your salary each month doesn't account for your full picture: mortgage interest, insurance premiums, charitable donations, childcare costs, private pension contributions... Most taxpayers have at least some deductions that reduce their taxable income and lead to a refund.
And if you had periods without income during the year, filing becomes even more valuable. This includes:
- Unemployment (without receiving unemployment benefits)
- Career breaks or sabbaticals
- Late job changes with a gap between positions
- Temporary inactivity for any reason
The easiest way to find out? Try it for free. You can run a full simulation on taxx.lu at no cost to see your estimated refund or tax balance. If the result shows a refund, you know it's worth filing. And if it shows tax to pay, that's important too, because in that case filing is most likely mandatory.
Either way, you'll know exactly where you stand before spending a cent.
Deadline: don't miss it
You have until 31 December 2026 to file your 2025 tax return or annual adjustment. That's a generous deadline, but don't let it slip. Overpaid tax won't be refunded automatically. You have to request it.
No automatic refund
The Luxembourg tax authorities do not refund overpaid withholding tax on their own. You must actively file a return (Form 100 or Form 163) to get your money back. If you don't file, you lose the refund.
File your first tax return with taxx.lu
Filing a tax return for the first time can feel overwhelming, but it doesn't have to be. taxx.lu guides you through the entire process step by step, with no LuxTrust required.
- Create your account and follow the step-by-step process. You're guided through each section and just need to answer questions.
- Import your documents automatically or upload them manually. Our AutoScan feature reads your certificates (officially recognised by the system) and pre-fills your return for you.
- Complete your information and check that everything is correct.
- See your estimated refund (for free) in real time as you fill in your return.
- Pay and download your completed forms, ready to submit.
- Optional: get your return verified by a tax expert. Choose our Plus (119€) or Premium (199€) package and a qualified expert reviews your tax return before you submit it, so you can be sure nothing is missed.
And if you ever get stuck, our support team is always available by chat or email.
Start your return and find out how much you could get back.
