Is Class U better than Tarif T?

It depends on how income is split. Class U usually wins when the lower earner brings in at least about 25% of household income; Tarif T usually wins for single-earner couples or large income gaps.

Do singles have to do anything?

No. Taxpayers in classes 1 and 1a move to Class U automatically from tax year 2028.

Can we go back to Tarif T after switching?

No. The joint request for individual taxation is irrevocable.

Does the €5,400 early-childhood allowance apply under Tarif T?

No. The voted text grants it to taxpayers taxed under the Class U scale (article 118).

Class U vs Tarif T: Which Is Better for You in 2028?

From tax year 2028 Luxembourg moves to one tax scale for everybody, Class U. Couples who are already married or in a PACS get a second option, Tarif T, which keeps today's joint taxation for up to 25 years. Whether one beats the other depends almost entirely on how your household income is split.

The short answer

If you are single or a single parent, there is nothing to choose: you move to Class U automatically on 1 January 2028. If you are married or in a PACS before 2028, you choose. As a rule of thumb, Class U usually wins when the lower earner brings in at least about a quarter of household income, and Tarif T usually wins for single-earner couples or couples with a large income gap. The switch to Class U cannot be undone, so it pays to run the numbers first.

What Class U and Tarif T actually are

Class U (the "tarif U" in the new article 118 of the income tax law) is an individual scale. Each person is taxed on their own income: 0% up to €26,650, then 11%, 14%, 19%, 25% and 32% bands up to €49,500, 39% up to €117,500, and 40%, 41% and 42% above that. The employment fund surcharge of 7% (9% on income above €150,000 per person) comes on top.

Tarif T (the "tarif transitoire" in new article 118bis) is today's class 2 in a new form. The couple's income is added together and taxed on a scale whose bands are twice as wide: 0% up to €26,460 for the couple, rising in small steps to 39% from €108,180 and 42% above €469,740. That is the classic "splitting" effect. The surcharge is 7%, or 9% above €300,000 for the couple. Tarif T is available until the end of the 2052 tax year. The full rate tables and worked examples are in our Class U tax brackets 2028 guide.

Singles: an automatic gain

People in today's class 1 move to Class U without doing anything. Because its 0% band is much wider than class 1's, most single taxpayers pay less. The government puts the gain at between €654 and €2,519 a year depending on taxable income, as reported by RTL.

Single parents: Class U plus a bigger credit

Class 1a disappears too. Single parents are taxed on the Class U scale, and the reform raises the single-parent tax credit (CIM) from €3,504 to €4,008 a year for adjusted taxable income below €60,000. Above that it tapers down, to a floor of €750 above €105,000. The credit is not granted when both parents live together with the child, or when the child alternates between two homes of parents who share parental authority.

Parents of children under three at the start of the year also get the new early-childhood allowance of €5,400 per child, deducted from taxable income. A parent who alone receives the child tax reduction gets the full amount; parents who share it get half each. Note that this allowance only exists under Class U.

Married and PACS couples: compare both

For couples, the answer depends on the split. Here is what the calculator's formulas give for a few households without children (annual tax in 2028, including the surcharge, before tax credits):

Partner A	Partner B	Tarif T	Class U	Better choice
€80,000	€0	€9,057	€17,774	Tarif T, by €8,717
€60,000	€20,000	€9,057	€9,428	Tarif T, by €371
€50,000	€30,000	€9,057	€5,650	Class U, by €3,408
€40,000	€40,000	€9,057	€4,247	Class U, by €4,810
€90,000	€60,000	€36,411	€31,376	Class U, by €5,035

Notice how the household tax under Tarif T stays the same whatever the split (€9,057 for every €80,000 couple), while Class U falls sharply as the income becomes more even.

Why "about 25%" is only a rule of thumb

The break-even split moves with total income. Using the calculator's formulas, with no children, Class U starts to win once Partner B earns roughly 21.5% of a €60,000 household income, about 26.5% of €80,000, 25% of €100,000 and only about 17.5% of €150,000. RTL's explainer quotes the same order of magnitude: switching tends to hurt when the lower earner brings in less than 25%, and that percentage depends on the couple's total income.

Children can tip the balance. With one child under three, the €60,000 / €20,000 couple above goes from paying €371 more under Class U to saving about €756, because the early-childhood allowance only applies under Class U.

Before you decide

The switch is final. Once a couple opts for individual taxation there is no way back to Tarif T, for that year or any later year.
Think a few years ahead. Parental leave, a partner going back to work or a promotion can flip the result. You can stay on Tarif T now and switch later, but never the other way round.
Mind the deadline. To have Class U on your 2028 payslips, the joint request has to reach the tax administration by 30 November 2027. See our Bill 8676 guide for the details.
Remember what the estimate leaves out. Tax credits, deductions and rounding by the ACD are not in these figures.

Not tax advice. This guide explains Bill 8676 as adopted by the Chamber of Deputies at first vote on 28 October 2026. The law still has to be finalised and published, and your own situation may differ. Check with the tax administration (ACD), your payroll team or a tax adviser before you decide.

Class U vs Tarif T: which is better for you?