About Luxembourg

The cost of living in Luxembourg

Discover how utilities, real estate, dining, childcare, and the cost of living in Luxembourg differ from those in your home country.

Cost of living in Luxembourg

By Expatica

Updated 18-1-2024

Luxembourg is a small country, but it boasts a powerhouse of economics and politics. Although it is an expensive country, the Grand Duchy is a popular destination for internationals – so much so, that almost half the population of Luxembourg is made up of foreign nationals.

To help you calculate how much your lifestyle will cost if you move to Luxembourg, read on for information on the following:


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General cost of living and standards of living in Luxembourg

The cost of living in Luxembourg is fairly high compared with many of its European neighbors, to the extent that it is typical for locals to head across the borders to Belgium, France, and Germany to buy electrical equipment and luxury items. Yet despite the high prices, Luxembourg boasts a VAT rate of just 16%.

The majority of internationals in the country live in or around the country’s capital, Luxembourg City. It is the most developed city in Luxembourg and serves as the political, economic, and cultural center of the country.

Luxembourg City landscape
Luxembourg City

Luxembourg City ranks 52nd out of 227 cities in Mercer’s 2022 cost of living rankings. This means it’s more expensive than Rome or Lagos, but less expensive than Vienna, Brussels, or Singapore.

Luxembourg performs quite well in the OECD Better Life Index. The country ranks highest among the OECD countries in disposable income, and higher than average for jobs, work-life balance, community, civic engagement, health and well-being, housing, and environmental quality.

The poverty rate in Luxembourg is 19.2%, which is €2,177 per adult. This is below the European average (22.5%). In Luxembourg City, however, the poverty rate stands at 22%, with one in five people living below the poverty line.

Single-parent families are most likely to be at risk of poverty, as well as large families and those with a lower level of education.

Cost of living in Luxembourg City

The capital of Luxembourg, Luxembourg City is the most populated city in the country. Its cost of living is estimated to be:

  • 38% more expensive than Lisbon
  • 5% cheaper than Paris
  • 4% more expensive than Brussels
  • 11% more expensive than Rome
  • 3% more expensive than Berlin

Wages and salary in Luxembourg

In comparison to other neighboring countries, wages in Luxembourg are generous. The country has the highest minimum wage in the European Union (€2,387 per month). This can be raised or lowered depending on the worker’s skills and age.

Housing costs in Luxembourg

Overall, the cost of housing in Luxembourg is expensive. In 2022, housing in the country cost 87% more than the European Union (EU) average.

If you are only planning to stay in the country for a short period, the best idea is to rent. If you intend to stay long-term, you should consider buying property.

Rental costs in Luxembourg

Renting property in Luxembourg can be quite expensive. In addition to monthly rent, you may also have to pay a deposit of one to three months.

In the center of Luxembourg City, the average rent prices are around €1,610 for a one-bedroom apartment. For a three-bedroom dwelling, expats should expect to pay up to €4,000. Elsewhere in the country, particularly the south and east, house prices are slightly more affordable.

Property prices in Luxembourg

If you want to buy property, you will need a deposit of at least 20% of the property’s value to get a mortgage in Luxembourg.

The average price per square meter varies significantly. In the most popular areas, you could be looking at paying as much as €15,000 per square meter for an apartment, while apartments out of the city center up to €11,000 per square meter.

Cost of domestic bills in Luxembourg

Utility bills in Luxembourg

The cost for basic utilities in Luxembourg including electricity, heating, cooling, water, and garbage in an 85 square-meter apartment is about €250. Electricity prices in Luxembourg are €0.20 per KWh, which is just below the EU average of €0.25 KWh.

Wind turbines in Luxembourg

Telecommunications in Luxembourg

There are several telecommunication companies in Luxembourg. Most of them offer a selection of deals on mobile packages, TV, and internet. For an idea of cost, POST Luxembourg offers internet, TV, and telephone packages from around €40 to €80 per month.

Healthcare costs in Luxembourg

The public healthcare system in Luxembourg provides free basic healthcare to all residents.

However, employed individuals pay monthly contributions to the healthcare system at a rate of 12% of their gross earnings. Employers also pay half the contribution costs on behalf of employees.

These contributions cover residents for childbirth, rehabilitation, hospitalization, medical prescriptions, and consultations. However, treatment must be paid for upfront and recovered later provided you have made sufficient contributions.

Although the public healthcare system will be sufficient for the majority of expatriates, you do have the option of taking out private health insurance.

Childcare costs in Luxembourg

Childcare is expensive in most countries and with the high cost of living in Luxembourg, finding an affordable solution to look after your children can be challenging.

Families with young children have the option of a crèche, day nursery, independent babysitter, or au pair. A crèche accepts children from the age of three months old up to the age of four, and parents pay according to their income. Low-income families may be able to get subsidies known as cheque-service accueil (CSA) to help with childcare costs.

Should you require a full-time childminder in Luxembourg, you could hire an au pair. There are several criteria that you and your au pair need to meet, which you can find on the Luxembourg public information portal.

They are entitled to a fifth of the minimum wage as pocket money and must also be provided with board and lodgings. Bear in mind that a live-in au pair will add to your grocery bills, but it might still be cheaper than a private nursery.

Study costs in Luxembourg

Despite the Grand Duchy’s high rankings on the OECD Better Life Index, education is one of the few areas where it falls behind.

State schools are free of charge for internationals that are registered with Luxembourgish social security. However, lessons are taught in one or all three of the official languages: German, French, or Luxembourgish. Students must be proficient in all three languages to graduate.

University library in Luxembourg

Expat children typically attend one of the international schools in Luxembourg, but tuition fees are high. Fees cost around €3,000 for preschool and up to €20,000 a year for 16-year-olds. Fees increase each year according to the age of students. There is also an additional one-time application and entrance fee to enroll your children.

Luxembourg’s university fees are much less expensive. Tuition fees are either €200 or €400 per semester for the majority of bachelor’s programs at public universities. This is likely to be higher at private institutions.

Cost of food and drink in Luxembourg

Groceries in Luxembourg

The cost of grocery shopping is higher in Luxembourg than in most places. In 2021, the average price of food, beverages, and tobacco was 25% above the EU average.

The cost, however, does depend on where you shop. Luxembourg-owned supermarkets Cactus and Alima might be a little more expensive than some of the foreign chains such as Auchan and Match & Smatch. For the lowest grocery prices, try Aldi and Lidl, both of which have several stores in Luxembourg.

Here are some of the average prices for essential groceries in Luxembourg:

  • One liter of milk: €1.30
  • Loaf of fresh white bread: €2.82
  • One kilogram of rice: €2.33
  • 12 eggs: €3.74
  • Local cheese (one kilogram): €16.82

Cost of dining out at restaurants in Luxembourg

Eating out in Luxembourg can be expensive. However, you can still enjoy good quality food in inexpensive restaurants for €10–25 per person. A mid-range restaurant will average out at around €70 per person.

An outdoor café in Luxembourg

If you’re dining on a budget, the cost of a typical lunch is between €10 and €12.

Beer, wine, and spirits in Luxembourg

A half liter of local or imported beer in a pub or restaurant will set you back about €5. Meanwhile, you can find much cheaper beer in supermarkets: between €2–3.50. A bottle of mid-range wine costs around €10.

Transport costs in Luxembourg

Luxembourg has an excellent public transport network consisting of buses and trains. Not only that, but public transport across the country is free. The only exception is if you travel first class on a train, which costs €3 for two hours or €6 for a day ticket (valid until 04:00 the next day). You can also buy ten two-hour tickets for €24.

Buses in Luxembourg City

Taxi fares in the Grand Duchy are another matter. The starting tariff is around €4 and the average cost per kilometer is €3.

Alternatively, if you prefer driving in Luxembourg, fuel prices are about €1.50 a liter for unleaded and €1.50 for diesel.

Leisure activities in Luxembourg

Clothing in Luxembourg

Prices for high-street clothing in Luxembourg are similar to surrounding countries. For example, a pair of mid-range jeans will set you back an average of €70, while a summer dress costs about €36. You can expect to spend about €100 on a pair of running shoes and €117 on dress shoes.

These are roughly the same as prices in France and costs in Belgium.

Hobbies in Luxembourg

If you’re into sports, you can expect to pay €20–80 for a gym membership, depending on which facilities you want to use and when. A tennis court costs around €19 to rent for an hour.

For movie fans, you’ll pay €10–16 for an international release at the cinema. This is in line with other European countries.

Taxation and social security in Luxembourg

Personal income tax in Luxembourg is based on your marital status and the amount of income for each household. Single people are taxed on class 1 or 1a contributions and married couples on class 2 contributions.

If both spouses in a married couple earn taxable incomes, the class 2 contributions are based on a combined assessment. Separated couples are typically granted class 1 or 1a contributions.

Carer helping pensioner put on shoe in her house
Photo: Maskot via Getty Images

Taxable income starts from €11,265 a year. Individuals that earn less than this amount do not pay taxes. The maximum is 42% on an income that exceeds €200,004.

Social security contributions in Luxembourg are paid directly from your salary and cover illness, unemployment, occupational accidents, pension, childbirth, long-term care insurance, and death.

Pension costs are 24% of your gross income, which goes to the government’s fund for state pensions and benefits for invalidity citizens. This 24% is made up of 8% from you, 8% from your employer, and 8% from the state. Your monthly contribution to health insurance is €107.58.

Assistance with living costs in Luxembourg

There are several cases in which you might be eligible for benefits. Luxembourg offers financial help for the following:

Family benefits in Luxembourg are quite generous. Parents can receive a birth grant which is made up of three amounts of €580.03 including a prenatal allowance, an allowance for the birth, and a postnatal allowance. This grant is based on certain eligibility criteria. Otherwise, there is a monthly family allowance (allocation familiale) of €271.66 which increases by €20.53 once your child is 6, and by €51.25 when your child turns 12.

In addition, you also receive a monthly ‘back to school’ allowance (allocation de rentrée scolaire) of €115 per month for children over six and €235 for children over 12. As well as these monthly allowances, if you need to take parental leave for the care of your child, you can receive an amount based on your average monthly income. There are also supplementary allowances for disabled children.

If you are involuntarily unemployed and living in Luxembourg, you can receive benefits provided you are registered as a job seeker and have worked at least 16 hours per week for at least 26 weeks over the past year. This amounts to 80% of your previous gross salary over the past three months, or 85% of your gross salary if you have children.

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