Luxembourg Tax Class Comparison Calculator

Luxembourg assigns every taxpayer a tax class on their annual Retenue à la Source (RTS) card: Class 1 for single, Class 1a for single parents and singles aged 65+ or widowed, Class 2 for married couples and registered PACS partners. Class 2 uses splitting (combined income halved before progressive scale, doubled at the end) — usually most favorable. Source: Administration des Contributions Directes (ACD).

Why Class 2 Usually Wins

Class 2 income splitting (Splitting-Verfahren) cuts the average tax rate significantly when spouses earn unequally. A couple earning €80k + €20k pays roughly €18,000 in Class 2 vs €23,500 if assessed separately under Class 1 — a €5,500 saving. The benefit narrows as the income gap closes. Both spouses must be Luxembourg tax-resident (or one spouse meets 90% rule via Annex 165) for Class 2 to apply. Source: ACD Splitting Guide.

Class 1a Benefits and Caveats

Class 1a gives roughly 15% lower tax than Class 1 at moderate income levels via the concession parameter that flattens the rate curve up to about €45,000. Eligibility: single parents (single, divorced, separated with at least one dependent child), widowed taxpayers within 3 years of bereavement, and singles aged 65+. Single parents also benefit from the CIM (child reduction) plus single-parent boost up to €1,500/child/year.

How to Change Your Tax Class

After marriage, civil union (PACS), birth of a child, divorce, or 65th birthday, request the updated RTS card from your ACD office. Provide the relevant civil document. The new class takes effect from the month following request — backdated only with valid cause. Mid-year changes can cause employer payroll discrepancies; final-year reconciliation happens on the annual return (Form 100). Cross-border workers (frontaliers) have separate rules — see our Frontalier Quellensteuer tool.

Last updated May 2026. Sources: ACD — Tax Classes Guide, MyGuichet.lu — Tax.