Knowledge base
What does exceeding the threshold cost me?
A rough estimate of what changes if you exceed the threshold: what share of your salary becomes taxable in your country of residence, how much Luxembourg tax you get back on that share, and the likely difference.
Checked on
- Share of salary taxable in the country of residence
- —
- Estimated tax in the country of residence
- —
- Luxembourg tax refunded on this share
- —
- Estimated difference
- —
1How the estimate is made
- If you stay below the threshold, nothing changes: everything remains taxable in Luxembourg.
- Above it, all days outside Luxembourg count: share = salary × days outside Luxembourg ÷ days worked.
- Tax in the country of residence ≈ share × your marginal rate.
- Luxembourg tax refunded ≈ tax withheld × the same proportion.
- Difference = tax in the country of residence − Luxembourg tax refunded.
The marginal rate often slightly overestimates the actual tax, because not all of the share is taxed in the highest band. The Luxembourg average rate, on the other hand, is known exactly from your certificate.
2What the estimate does not take into account
- household composition, other income and deductions;
- France: the exact mechanism of the tax credit on the Luxembourg share;
- Belgium: the municipal tax (sources disagree on whether it applies to the Luxembourg share);
- Germany: the effect of the progression proviso on the rate;
- social security: it does not change as long as telework stays below 25 % (or below 50 % with an A1 form);
- costs and formalities for the employer (PASRAU registration in France, adjustment of tax withholding).