April 2023 sees a turning point in earnings: even with the indexation, some workers and pensioners may receive a lower salary in April than in the previous month.
An unusual situation that is made possible by the disappearance of the energy tax credit. This specific subsidy had been introduced by the government in summer 2022 to compensate for the shift in the index in July.
This tax credit however expired on 31 March. Since 1 April, it has been replaced by the indexation, which was triggered with a delay of nine months.
The energy tax credit, which was set at a maximum of €84 per month for those receiving less than €3,667 in wages or pensions, was more effective than indexation. For workers with social minimum wage, for example, it even “overcompensated” for their deferral, as the government had assured.
Depending on your tax profile (tax bracket, marital status, travel expenses...), the April net wage could be a few euros lower.
For those with a higher salary or pension, the effect is the opposite: the indexation and the end of the tax credit will increase the net salary.
Read also:STATEC anticipates next wage indexation in Q4 2023
For a pension of €2,000, the Ministry of Social Security estimated a difference of -€34: +€50 by the end of March thanks to the index, but -€84 without the tax credit. Thus a loss of income.
In the short term, the entry into force of the new tax credit, which raises the tax rate, will lead to an improvement in the net wage in Luxembourg. The agreement provides for a short-term tax credit this year, which corresponds to the adjustment of the tax table by two index brackets. Next year, a structural adjustment of the scale by 2.5 brackets is planned.
Read also:Here’s what will change on 1 April
