EUROCOSTSCOUNTRY COMPARISON · UPDATED 2026-07-15
Germany vs Luxembourg: taxes, salary and cost of living
A move between Germany and Luxembourg is not simply a choice between a cheap and an expensive country; income, rent and taxation pull the result in different directions.
Germany vs Luxembourg at a glance
| Indicator | Germany | Luxembourg |
|---|---|---|
| Standard VAT | 19% | 17% |
| Income tax | 0-45% | 0-42% |
| Social contributions | ~40% | 24.4% |
| Tax burden | 47.9% | 38.4% |
| Average monthly salary | €4,900 | €6,900 |
| Studio rent | €850 | €1,650 |
| Monthly food estimate | €350 | €420 |
| Gasoline | 1.72 €/L | 1.52 €/L |
| Electricity | 0.39 €/kWh | 0.21 €/kWh |
Salary advantage and purchasing power
Luxembourg records the higher listed monthly salary. The gap is €2,000, approximately 29.0% relative to the lower figure. Within the numeric EuroCosts sample, Germany ranks 7 of 27 for salary and Luxembourg ranks 3 of 27. Currency conversion and salary methodology can materially change a relocation budget.
Housing pressure and everyday spending
Germany has the lower listed studio rent by €800, a 48.5% difference relative to the higher rent. Germany sits 25 of 37 and Luxembourg 36 of 37 in the available low-to-high rent ranking. Germany also has the lower food estimate, so the housing result is reinforced by groceries.
After subtracting only the listed rent and food estimates, the simplified remainder is €3,700 in Germany and €4,830 in Luxembourg. This leaves €1,130 more in Luxembourg, before utilities, transport, healthcare, childcare or personal taxes not already reflected in salary.
VAT and personal tax context
Luxembourg has the lower listed tax burden by 9.5 percentage points. Standard VAT is 19% in Germany versus 17% in Luxembourg. Neither measure is a substitute for an individual payroll simulation.
Driving and mobility costs
Luxembourg has the lower listed gasoline price by €0.2 per litre. For a driver buying 50 litres a month, that headline difference is about €10 monthly, before insurance, parking and road charges.
Choosing by relocation scenario
For a remote worker paid from abroad, housing and daily costs may matter more than the local salary ranking; on that narrow view, Germany deserves closer attention. A locally employed professional should instead begin with salary and payroll definitions.
Where the comparison lands
Luxembourg produces the stronger simplified monthly remainder in this dataset, while Germany leads on listed rent. Your income source determines which advantage matters more.
Sources and data references
- PwC standard VAT rates
- PwC personal income tax rates
- PwC corporate income tax rates
- EuroCosts data scope and generation process
Explore Germany comparisons · Explore Luxembourg comparisons