Single in Luxembourg? Here's how much you'll save under the 2028 tax reform

Luxembourg's 2028 tax reform benefits singles most. See exactly how much less you'll pay at every income level.

If you're single and working in Luxembourg, you've been paying more tax than married couples at the same income level. That's about to change.

The government's new unified tax class (class U), launching January 2028, effectively gives singles the tax treatment that was previously reserved for single parents and retirees. The result? Significantly lower taxes across all income levels.

The numbers

Here's what changes for singles (current Class 1), these are the government's official projections:

• €40,000 gross income: +€2,406 net per year
• €50,000 gross income: +€2,600 net per year
• €75,000 gross income: +€2,517 net per year
• €100,000 gross income: +€2,518 net per year
• €125,000 gross income: +€2,519 net per year

That's roughly €200+ extra in your pocket every month, regardless of income level.

Why is this happening?

Here's a fact that surprised many: single taxpayers now significantly outnumber couples in Luxembourg. The current system, designed for a society where most adults were married, no longer reflects reality.

Luxembourg is also one of only five countries still using collective taxation (where married couples get preferential treatment). The OECD has long recommended individual taxation, and Luxembourg is finally making the shift.

Prime Minister Frieden framed it clearly: "Everyone should be able to choose their family model without the state getting involved. The state must be neutral in this regard."

What makes the difference?

Two key changes drive these savings:

1. Doubled tax-free threshold: The amount you can earn before paying any tax jumps from €13,230 to €26,650.

2. Better rate structure: The new unified class is based on Class 1a, which has more favorable rates than the current Class 1.

Bonus: Other deductions going up too

While you're saving on the base rate, you might also benefit from increased deduction limits:

• Insurance premiums & loan interest: ceiling up from €672 to €900
• Home savings: up to €1,500/year if you're between 18-40

When can I start saving?

The new rates apply from January 1, 2028. Your 2025, 2026, and 2027 tax returns will still use the current system. But from 2028 onwards, you'll see the difference in your monthly pay slip.