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Commentary

2.1.2 Deductions from earnings

Luxembourg

Various deductions are made from gross income before withholding tax is calculated and the standard deductions are coded into payroll calculations

Standard allowance deductions

Business expense allowance

Taxpayers may receive a flat-rate allowance for business expenses of EUR 540 per year in 2024 (and unchanged for several years). This amount is increased for disabled employees according to an impairment table. This allowance is taken into account within the tax withholding calculation.

If business expenses exceed the annual allowance of EUR 540 per year, then the employee may claim the actual cost of allowable expenses such as:

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