About taxes in Luxembourg

Luxembourg uses a 23-bracket progressive income tax with rates from 0% to 42%, plus an "Impôt d'équilibrage budgétaire temporaire" replaced by the Solidarity Surcharge (7%, or 9% above €150,000 single / €300,000 joint) levied on the income tax due. Your tax class drives withholding heavily: Class 1 (single, no children), Class 1a (single parents and over-64s), and Class 2 (married jointly assessed, partners, and certain widowed). Class 2 effectively splits income between spouses, producing significant savings versus Class 1 at the same income. Employee social contributions total ~12.45%: pension 8%, health (CNS) ~2.8%, dependency insurance 1.4% (after a deductible of 25% of the social minimum wage), and small accident/health-at-work levies. The CNS contribution funds public healthcare, so no separate health insurance is deducted. Inbound highly-qualified employees may benefit from the impatriate regime: up to 50% of certain elements (impatriation premium, housing, school fees) can be exempt from tax, capped at 30% of fixed annual salary, for up to 8 years. Luxembourg's tax year is the calendar year, with returns filed by 31 December of the following year for joint filers.