EUROCOSTSCOUNTRY COMPARISON · UPDATED 2026-07-15
Italy vs Luxembourg: taxes, salary and cost of living
A move between Italy and Luxembourg is not simply a choice between a cheap and an expensive country; income, rent and taxation pull the result in different directions.
Italy vs Luxembourg at a glance
| Indicator | Italy | Luxembourg |
|---|---|---|
| Standard VAT | 22% | 17% |
| Income tax | 23-43% | 0-42% |
| Social contributions | ~42% | 24.4% |
| Tax burden | 47.1% | 38.4% |
| Average monthly salary | €3,312 | €6,900 |
| Studio rent | €726 | €1,650 |
| Monthly food estimate | €320 | €420 |
| Gasoline | 1.74 €/L | 1.52 €/L |
| Electricity | 0.3 €/kWh | 0.21 €/kWh |
Salary advantage and purchasing power
Luxembourg records the higher listed monthly salary. The gap is €3,588, approximately 52.0% relative to the lower figure. Within the numeric EuroCosts sample, Italy ranks 12 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
Italy has the lower listed studio rent by €924, a 56.0% difference relative to the higher rent. Italy sits 19 of 37 and Luxembourg 36 of 37 in the available low-to-high rent ranking. Italy 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 €2,266 in Italy and €4,830 in Luxembourg. This leaves €2,564 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 8.7 percentage points. Standard VAT is 22% in Italy 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 €0.22 per litre. For a driver buying 50 litres a month, that headline difference is about €11 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, Italy 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 Italy 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 Italy comparisons · Explore Luxembourg comparisons