One-off bonus (R/REX/G) in Luxembourg: how to declare your extraordinary income

One-off bonus (R/REX/G) in Luxembourg: how to declare extraordinary income the right way and make sure you're not overpaying on tax.

Received a one-off bonus for 2023 or 2024, along with a letter from the Luxembourg tax office (Administration des contributions directes)?
Here's everything you need to know to declare your bonus with zero fuss and take advantage of the favourable tax treatment for extraordinary income.

This article covers:

• what a one-off bonus actually is,
• who's affected,
• which documents you'll need,
• and how to declare it on taxx.lu.

What is a one-off bonus and why is it classed as extraordinary income?

A one-off bonus is an exceptional payment that relates to previous years.
It could be:

• A retroactive payment for salary or benefits that were never paid out.
• A special bonus under the SAS collective agreement (social and care sector).
• Compensation linked to an earlier working period, but taxed entirely in a single tax year.

On your annual salary certificate, this bonus is flagged with one of the following codes: R, REX or G.

Who does the one-off bonus (R/REX/G) apply to?

• Employees covered by the SAS collective agreement (Secteur d'aides et de soins).
• Police officers and military personnel.
• Workers in the social and care sector, particularly those employed by organisations affiliated with the Fédération COPAS.
• Anyone who received a retroactive bonus shown on their salary certificate and recognised as extraordinary income by the tax office.

Even if you don't fall into any of these categories, check your official letter and salary certificate. Your bonus might qualify as extraordinary income too.

What documents do you need to declare a one-off bonus?

To declare your bonus correctly on taxx.lu, you'll need:

1. Your annual salary certificate
   • Bonus amount shown under code R, REX or G.
2. The official letter from the tax office
   • The letter confirming approval to apply the special tax regime for extraordinary remuneration.

Getting this right matters: a mistake could mean your tax is calculated incorrectly. On taxx.lu, we guide you through it step by step so you can be confident your return is spot on.

How do you declare the one-off bonus on taxx.lu?

• The bonus must be entered under the "Extraordinary income" section.
• The letter from the tax office and your annual salary certificate need to be uploaded as supporting documents.

taxx.lu takes care of the rest.

How extraordinary income is taxed

Extraordinary income (like a one-off bonus) is taxed in a special way so you don't get hit with a disproportionately high tax bill all at once.

Here's how it works:

• Tax is first calculated on your ordinary income.
• A quarter of the extraordinary income is added to your ordinary income, and the tax is recalculated.
• The difference between this new tax figure and the previous one is multiplied by four: that's the tax due on the extraordinary income.
• This tax can never exceed 24% of the extraordinary income.