Mention the cost of living in Luxembourg and people say "very expensive". Half true. The rent is high, but salaries are high too, buses are free and a few things that cost a fortune elsewhere, like school meals, cost nothing. The honest picture is a ledger, with big items on both sides.
Is the cost of living in Luxembourg really that high?
The heavy item is housing. The government's housing observatory published on 30 September 2026 that the median asking rent for an apartment in 2025 was €33 per square metre, about three times the level in neighbouring regions. For comparison, the same release gives about €12 per square metre in the northern Lorraine and about €10 in Wallonia, Rhineland-Palatinate and Saarland. In monthly terms, the same release puts the asking rent per dwelling at about €680 in northern Lorraine, about €750 in western Saarland and Rhineland-Palatinate and about €850 in south-east Wallonia. It gives no per-dwelling figure for Luxembourg, so multiply the price per square metre by the size of the flat you want.
These are asking rents for 2025 advertised flats, not the legal ceiling. The law caps rent at 5% a year of the owner's invested capital and the deposit at two months; see renting in Luxembourg.
What do salaries look like against that?
The social minimum wage sets the floor. Since 1 June 2026 (index 992.24) it is €2,771.33 gross a month for an unskilled adult, or €16.0192 an hour, and €3,325.59 for a skilled worker (120%), according to the labour inspectorate. It is adjusted at each indexation. Few countries have a floor this high, which is why so many people commute from across the border.
Employees also get at least 26 working days of paid leave a year and 11 legal public holidays. Our guide to working in Luxembourg has the rest.
What costs less than you expect?
- Public transport: free. Trains in second class, trams and buses are free for everyone, residents and visitors, since 29 February 2020. Only first-class train tickets and subscriptions are paid. Carry an ID, which can be requested on board.
- School meals and after-school care. In public primary school, meals are free for all pupils during school weeks, and day care in maisons relais is free from Monday to Friday, 7:00 to 19:00, during school weeks. Outside those hours and in the holidays, a contribution is set by the chèque-service accueil scale.
- State school itself. Public school and the public international tracks are free, with no registration fees.
- Family allowances. €315.04 a month for a child alone in the family group at 1 June 2026, plus €23.81 from age 6 to 11 and €59.44 from 12, indexed, according to the government's social parameters. A package announced in January 2026 mentions an extra €45 a month up to age 12, but we could not confirm its start date.
If you want to turn those headline numbers into your own budget, with a partner, children or a job on the other side of the border, Moovy can walk you through what applies to you and which official calculators to use. It guides you; it does not give financial advice.
What costs more than you expect?
Besides rent, watch for the taxes and contributions. Tax runs from 0% to 42% on a scale for class 1, with an employment fund surcharge of 7% of the tax, and pension contributions of 8.5% of pay for the employee and 8.5% for the employer since 1 January 2026, according to the CCSS (the State pays a share too). The exact amounts for you come from a payslip simulation. A property purchase carries 7% duties, offset by the Bëllegen Akt credit if it is your main residence; see buying property in Luxembourg. A private international school, if you choose one, charges fees that each school sets.
If you drive, count insurance, the annual vehicle tax and the technical inspection; read driving in Luxembourg. With free public transport, many households find the second car is the first thing they drop.
Is it cheaper to live across the border?
Yes on rent, no on everything. Living in France, Belgium or Germany and commuting means cheaper housing and a different tax situation, which includes the 34-day rule on remote work and a separate social security logic. Check the rules of the tax administration (ACD) and the CCSS for your country of residence before you decide. The saving on rent can be eaten by the commute, the time and the extra paperwork.
How do you build a realistic budget?
- Start from your net salary, not your gross: ask your employer for a simulation with your tax class.
- Fix the rent first. Use the €/m² figure as a guide and the legal rules as a defence.
- Add the fixed items: health (covered through your contributions), insurance, phone, energy.
- Subtract what is free: transport, school meals, early years hours.
- Keep a margin for the first months, when the deposit, agency fees and furniture land at once.
What is a typical monthly budget for the cost of living in Luxembourg?
There is no official "average household" that fits everyone, and we would rather not invent one. Instead, build a budget from lines you can check. Start with the housing line: the asking rent per square metre multiplied by the surface you need, then compared with the legal rules on deposit and caps. Add your tax and social contributions from a payslip simulation. Then list the lines the state reduces for you: public transport, school meals and day care hours in school weeks. The remaining lines, such as groceries, insurance and leisure, depend on your lifestyle and are easiest to estimate by tracking your first two months.
How does the cost of living in Luxembourg compare for a family?
Families feel the system most. A child alone in a family group receives €315.04 a month in family allowances (June 2026), with supplements by age. Public school, school meals and after-school care in school weeks are free; outside those hours, the childcare service voucher (chèque-service accueil) scale applies. If you choose a private international school, its fees are set by the school and can outweigh every other saving, so compare them with the free public international tracks first. The detail is in schools in Luxembourg for expat children.
For a couple with two incomes, class 2 taxation may lower the tax bill, so ask your employer for a payslip simulation with your tax class. Always run the numbers with your actual family situation before comparing offers.
The numbers in this guide are official figures for 2025 and 2026, but prices and wages are indexed. Check the sources before you commit to a lease or a job offer.