Updated on
07/03/2025
Social minimum wage tax credit (CISSM)
What is the CISSM? — The CISSM (Crédit d'Impôt Salaire Social Minimum) is a tax credit in Luxembourg designed to reduce or eliminate the tax burden for workers earning the social minimum wage. This mechanism reflects Luxembourg's progressive tax policy aimed at supporting low-income households and enhancing their purchasing power.
How does the CISSM work? — The CISSM is calculated based on your hypothetical gross monthly salary, taking into account your working hours relative to full-time employment. It is automatically applied to eligible workers' payslips and directly reduces the amount of withholding tax.
Does the CISSM apply to part-time contracts? — Yes, the CISSM applies to part-time workers, but the amount is prorated based on the ratio of actual hours worked compared to full-time hours (173 hours per month).
Who is eligible for the CISSM?
- Workers affiliated with a Luxembourg social security scheme.
- Employees earning a gross monthly salary within the eligible salary range for the current year.
- Both residents and non-residents can qualify.
Why is the CISSM important? — The CISSM effectively neutralizes tax charges for minimum wage earners, increasing their net income and purchasing power. It represents an important element of Luxembourg's efforts to ensure fair taxation and reduce income inequality.
What should I do if the CISSM is not applied to my payslip? — If the CISSM is missing from your payslip, verify that your employer has your tax card on file. Ensure it has been submitted via MyGuichet.lu. If the issue persists, contact your employer's payroll department or the Luxembourg tax authorities (Administration des Contributions Directes) for assistance.
Evolution of the CISSM
2019: Introduction of the CISSM
- Eligible salary range:
- 1500€ to 2500€: 70€/month
- 2500€ to 3000€: Decreasing amount calculated as:
CISSM = 70 / 500 × [3000 − Hypothetical Gross Monthly Salary]
- No credit granted for:
- Salaries below 1500€
- Salaries above 3000€
2022: Adjustment of Salary Thresholds
- Eligible salary range:
- 1800€ to 3000€: 70€/month.
- 3000€ to 3600€: Decreasing amount calculated as:
CISSM = 70 / 600 × [3600 − Hypothetical Gross Monthly Salary]
- No credit granted for:
- Salaries below 1800€
- Salaries above 3600€
2024: Thresholds Maintained
- No significant changes from 2022.
- The credit remains capped at 70€/month, with unchanged salary limits.
2025: Increase and Expansion
- New amounts:
- 1800€ to 3000€: 81€/month
- 3000€ to 3600€: Decreasing amount calculated as:
CISSM = 81 / 600 × [3600 − Hypothetical Gross Monthly Salary]
- Inclusion of Tax Class 1:
- Workers earning the SMW in Tax Class 1 will now benefit from full tax neutrality.
- No credit granted for:
- Salaries below 1800€
- Salaries above 3600€
Can the CISSM be combined with other tax credits? — The CISSM can be combined with other tax credits such as the CIS (Crédit d'Impôt Salarié) and CIM (Crédit d'Impôt Monoparental) when applicable. These credits are calculated and applied separately.
How is the CISSM different from the CIS? — While both are tax credits for employees, the CISSM specifically targets workers earning around the social minimum wage, whereas the CIS (Crédit d'Impôt Salarié) applies to a broader range of salaries and is calculated differently.
Synonyms: Social minimum wage tax credit, minimum wage tax relief, low-income tax credit.