Salary rate
Annual
Month
Semimonthly
Weekly
Day
Hour
Withholding
Salary
€ 12,914
Income Tax
- € 140
Health care
- € 394
Pension
- € 1,033
Dependency Insurance
- € 83.64
Total tax
- € 1,650
Net pay
* € 11,264
Marginal tax rate
21.1%
Average tax rate
12.8%
87.2%
Net pay
12.8%
Total tax
Total tax
Net pay
The Taxberg
€ 11,264
Net pay
€ 1,976
Tax the employer pays
€ 1,650
Tax you pay
Total tax paid
€ 3,626
Did you know your employer also pays tax on your salary? It costs the employer € 1,976 to pay you € 12,914. In other words, every time you spend € 10 of your hard-earned money, € 2.81 goes to the government.
Real tax rate
24.4%
So, with you and the employer both paying tax, what used to be a 12.8% tax rate now rises to 24.4%, meaning your real tax rate is actually 11.6% higher than what it seemed at first.
Summary
If you make € 12,914 a year living in Luxembourg, you will be taxed € 1,650. That means that your net pay will be € 11,264 per year, or € 939 per month. Your average tax rate is 12.8% and your marginal tax rate is 21.1%. This marginal tax rate means that your immediate additional income will be taxed at this rate. For instance, an increase of € 100 in your salary will be taxed € 21.09, hence, your net pay will only increase by € 78.91.
Bonus Example
A € 1,000 bonus will generate an extra € 789 of net incomes. A € 5,000 bonus will generate an extra € 3,946 of net incomes.
NOTE* Withholding is calculated based on the tables of Luxembourg, income tax. For simplification purposes some variables (such as marital status and others) have been assumed. This document does not represent legal authority and shall be used for approximation purposes only.