Question 1

How much social security does a self-employed person pay in Luxembourg?

Accepted Answer

Self-employed individuals in Luxembourg pay both the employer and employee portions of social security contributions, which roughly doubles the contribution compared to an employee on the same gross. This typically amounts to 25–28% of gross salary covering pension, health insurance (illness and cash benefits), and long-term care insurance.

Question 2

What is the difference between a self-employed and employee net salary in Luxembourg?

Accepted Answer

On the same gross salary, a self-employed person takes home significantly less than an employee because they pay both employer and employee social contributions. For example, on €5,000/month gross, the gap can be €400–600/month depending on tax class.

Question 3

Does a self-employed person in Luxembourg pay municipal tax?

Accepted Answer

Self-employed individuals may be subject to municipal business tax (impôt commercial communal / ICC) depending on their legal structure and municipality. Sole traders and gérants of SARLs may qualify. Enable the municipal tax option in the calculator to include an estimate.

Question 4

What VAT rate applies to self-employed work in Luxembourg?

Accepted Answer

VAT registration is required once annual turnover exceeds €35,000. The standard rate is 17%, with reduced rates of 14%, 8%, and 3% for specific goods and services. VAT is collected from clients and remitted to the state — it does not count as personal income but is deducted from your gross before the net calculation.

Question 5

Can a company director use this calculator?

Accepted Answer

Yes. This calculator is designed for gérants and company directors in Luxembourg who draw a fixed monthly or annual gross salary from their company. It applies the self-employed social contribution rules (2× contributions) and optional municipal tax to show your net take-home pay.

Freelancer Gross to Net Calculator