Cost of living, standard of living: What you need to know in Luxembourg

Are you planning to come to Luxembourg to earn a higher salary and enjoy a higher standard of living? Excellent idea! However, you should also be prepared for a higher cost of living than in most other countries. Here are all the expenses you need to plan for when living in the Grand Duchy:

What is the average standard of living in Luxembourg?

In Luxembourg, the average employee earns €5,400 net per month.

The net minimum wage is around €2,250 net for an unskilled worker, and around €2,620 net for a skilled worker.

This is much higher than in France or Belgium, for example, where minimum wages are €1420 and €1900-1950 net respectively.

However, the cost of living is also higher than elsewhere, and there are a few things to be aware of:

• Up to 55% of a household's income is spent on housing (rent or credit, insurance, charges, etc.). When you arrive in Luxembourg, be prepared for higher housing costs than elsewhere.
• Salaries, pensions and minimum social benefits are automatically adjusted in line with inflation (this automatic indexation system dates froma law passed in 1921 and is specific to Luxembourg). Your salary will follow inflation - that's positive. However, prices will also align. You will therefore pay more for your everyday products and services, and this may increase more quickly than elsewhere.

The bottom line: yes, you'll earn more in Luxembourg. But you'll also pay more for your shopping, contracts and subscriptions. You need to carefully calculate how much you have left to live on and whether you think it's worth moving.

Here's a video that sums up the paradox between very good salaries and the particularly high cost of living in the Grand Duchy of Luxembourg:

Housing: 1st item of expenditure for Luxembourg households

Housing is the biggest expense for any Luxembourg residentThis takes up between 38% and 55% of the budget, depending on the family situation.

This is due to very strong demand in the face of limited supply, fuelled by the constant influx of new residents and cross-border workers.

Luxembourg City and its neighbouring communes charge the highest ratesThe north of the country offers more affordable prices, up to 40% lower than in the capital.

In addition to rents, service charges for tenants are also high in Luxembourg. Expect to pay between 180 and 400 euros a month for electricity, heating, water and maintenance of communal areas (depending on the size of your home, your consumption and whether you have outbuildings such as a cellar or parking space).

Consult our guide to rental prices in Luxembourg.

You can also optimise the costs associated with your home by savings on your contracts and subscriptions in Luxembourg.

Childcare or public school fees: the 2nd biggest expense

Depending on the location and the type of crèche or school chosen, the budget can be more or less significant.

• Concerning crèches : It varies enormously depending on the type of crèche you choose (municipal or private, subsidised or not...) and the financial assistance available to households from the State. However, it's not uncommon to find yourself paying €800 to €1,000 a month (or even more) for a place in a crèche.
• Public schools: Allow between €1,200 and €2,000 per child per month, depending on the establishment, and any subsidies or preferential rates granted by your employer.

A word of advice: take stock of the assistance for which you are eligible before moving house and committing yourself to this type of expense.

Consult our complete guide to crèches in Luxembourg or on the choosing a school for your children.

Food and shopping: the 3rd biggest item of expenditure

Food is the second largest item of household expenditure in Luxembourgrepresenting approximately 15 to 25% of the family budget depending on the composition of the household.

In Luxembourg, food prices are generally 15 to 20% higher than in neighbouring countries (France, Belgium, Germany). For 1 month's shopping, it's not uncommon to spend €400-500 for a single person, or €800-1000/month for a family with children.

But the difference is even more marked on certain products that involve jobs in Luxembourg. A pizza in a restaurant can easily cost €25 or €30 in the capital. A beer in Luxembourg will cost as much as a beer in Paris!

This is also why more and more expats are choosing to do their shopping on the border (in Thionville or the Arlon region, for example).

Transport and healthcare costs: relatively low expenditure in Luxembourg

There are two major advantages to Luxembourg's standard of living:

1. Transport is completely free. You can cross the country by bus, tram or train: you won't have to pay a thing.
2. Health costs are fairly low. The CNS reimburses most consultations and treatments at 88%, but sometimes up to 100%. All you need is a complementary health insurance plan to provide 100% of reimbursement in all cases. (Note that this also means that the health contribution deducted from your salary may be higher than elsewhere).

These two items can save you several hundred euros a year (or even more) compared with living in other countries where transport costs are high and health expenses are poorly reimbursed.

Consult our guide " Do you really need a car in Luxembourg? " ?

What is more expensive in Luxembourg?

If we were to give a few concrete examples, here are some prices you can :

• A normal restaurant costs a minimum of €30/meal
• A drink at the bar will cost you between €8 and €10
• A GP consultation will cost you a minimum of €60/consultation
• Good car insurance will cost you €100-120/month

Products that are cheaper in Luxembourg are generally those that are heavily taxed in other countries, such as petrol/diesel or tobacco.

How much will it cost to live in Luxembourg?

It's very important to know what you can expect to spend per month before considering moving to Luxembourg. Here is an overview of an average monthly budget for each type of profile:

Monthly budget for a young single professional

Here's a typical budget for a junior or young executive aged 25-35, with an active social life and accommodation in the inner suburbs.

• Accommodation : 1,400 euros (studio/1 bedroom + utilities)
• Power supply : 450 euros (shopping + moderate dining out)
• Transport : 0 (free public transport)
• Health : 80 (complementary healthcare + running costs)
• Leisure/outings : 500 (sport, culture, social life)
• Clothing/Miscellaneous : 200 euros
• Recommended savings : 500 euros

Total budget : 3,130 euros net per month

Recommended minimum gross salary: €4,200

Budget for a couple without children

In this scenario, the couple are two working people, with a comfortable lifestyle, a 2-bedroom flat and no children.

• Accommodation : 2,200 euros (2 bedrooms + utilities)
• Power supply : 750 euros (shopping + restaurants)
• Transport : 150 (occasional car + insurance)
• Health : 200 (two additional insurances)
• Leisure/Travel : 800 (activities for two, culture, trips)
• Clothing/Miscellaneous : 300 euros
• Recommended savings : 800 euros

Total budget : 5,200 euros net per month

Recommended combined gross income: €7,000

Budget for a couple with 2 children

Here's the budget for a couple with 2 children in a large flat (or house) with a mixed public/private education.

• Accommodation : 3,500 euros (3-4 bedroom house + utilities)
• Power supply : 1,200 euros (family shopping + outings)
• Transport : 400 (family car compulsory)
• Health : 300 (whole family + child care)
• Education/Care : 1,500 (partial public school + activities)
• Family leisure activities : 600 euros (activities, sport, culture)
• Clothing/equipment : 400 (growing children)
• Savings/Life insurance : 1,000 euros

Total budget : 8,900 net per month

Recommended combined gross income: €12,000

NB: If you are planning to move to Luxembourg soon, please note that we have created a platform especially for you. With our Expatriate Service, You can find all the subscriptions you need for your move (telecoms, energy, insurance, banking) in a single form. Quick and easy! You can settle in with peace of mind.