Salaries and pensions in Luxembourg rise 2.5% from 1 June 2026 as a new index tranche kicks in. The same year brings higher pension contributions (24% to 25.5%), a carbon tax up to €50 a tonne, a permanent Bëllegen Akt home-buyer credit, and the first moves toward a single tax class in 2028. Here is the full picture for your wallet.
From 1 January 2026, Luxembourg raises its carbon price to EUR 45 per tonne of CO2, increases the CO2 tax credit to EUR 216, and lifts tobacco excise duties by about EUR 0.30 per cigarette pack and EUR 0.40 per 50g rolling tobacco pack.
Luxembourg's coalition has adopted a Climate Social Plan to shield vulnerable households and micro-enterprises from rising carbon costs. Within weeks, the country's largest unions and an environmental NGO welcomed the framework but warned it lacks firm budgets, clear target groups, and a binding timeline.