Tax class (classe d’impôt)

There are three main tax classes in Luxembourg:

• Class 1: Single individuals or separated/divorced individuals without dependents.
• Class 1a: Single individuals or separated/divorced individuals with dependents, and taxpayers aged 65 or older.
• Class 2: Married couples or individuals in a civil partnership, taxed jointly.

Your tax class is assigned based on your personal situation at the beginning of the tax year, such as whether you are married, have children, or are a single parent.

Yes, your tax class can change if your personal situation changes during the year. For example, if you get married, have a child, or get divorced, you may be assigned a different tax class.

Your tax class determines the percentage of your income that is subject to tax. In general, those in Class 2 (married couples) benefit from more favorable tax rates, while Class 1 tends to have higher rates due to the absence of dependents or a joint income.

Cross-border workers may also be classified into one of the tax classes based on their personal circumstances, though specific rules may apply, especially for those living in neighboring countries but working in Luxembourg.

While it's still not confirmed, the Luxembourg government has announced a major tax reform that will introduce a single tax class for all taxpayers starting in 2028. The reform aims to replace the current system (Classes 1, 1a, and 2) with a system of individual taxation, regardless of marital or family status, in order to promote fairness and simplicity. According to the Minister of Finance, about 85% of the population is expected to benefit through increased purchasing power. However, the reform is projected to result in a long-term revenue loss of €800 to €900 million for public finances.