Luxembourg attracts a workforce from neighboring countries and beyond, due to a booming economy and higher wages than all OECD countries.
However, the cost of living is high in many aspects such as housing, food and clothing. Beyond the salaries which appear very attractive in Luxembourg, it is therefore necessary to evaluate the daily cost of living in the Grand Duchy.
Luxembourg household budget
According to the latest figures published by STATEC (Luxembourg’s statistics agency), an employee in Luxembourg will receive an average annual salary of 65,801 euros for working on time in 2018. This is confirmed by the OECD, which states that the average salary in Luxembourg is the highest among OECD countries according to the latest study, with an average annual salary of 68,681 dollars in 2019.
Nevertheless, if the minimum wage is now more than 2,000 euros gross monthly, according to the latest STATEC figures for 2019, it appears that an average net income of at least 4,213 euros (+3.3% compared to 2018) is required for a couple with 2 children, 2,912 euros (+7.6%) for a couple without children, 2,110 euros (+6.1%) for a single person.
Indeed, housing represents a major part of a luxembourgish household budget. A minimum of 1,542 euros per month is required to accommodate a family of 4, 1,292 euros for a couple with no kids and 1,101 euros for a single person (heating costs included). This is equivalent to 38% of the income for a couple and 55% for a single person respectively!
Food is the second largest source of expenses. A family of 4 people must spend about 920 euros per month for food. A couple will need 565 euros and a single person at least 271 euros. This item represents up to 25% of the budget for a couple.
Social life represents the 3rd largest item of expenditure with about 13% of the budget for all households. Transport is the 4th largest expense with 421 euros per month for a family of 4 and 235 euros for a single person.
A Eurostat study published in 2019 shows that housing represents a quarter of the household budget (attention, excluding purchase costs), and is in line with the European average. The second spending item would be on transport, with 14.4% of the budget, just ahead of service-related expenditure (insurance, social protection,…) with 14% of costs. Food and non-alcoholic beverages would represent nearly 9% of the budget.
Fuel consumption for cars is estimated at €1,440 per year per household, or 2% of expenses.
Price levels in Luxembourg
Looking at services and other consumer goods, prices in Luxembourg appear higher than in other European countries.
Electricity and gas prices reach record levels in 2019. A household of 2 people must spend about 250 euros per month of electricity and heating. Internet subscription costs about 50 euros per month on average, depending on the speed.
On average, it costs 17 euros for a meal in an ordinary restaurant and 3 euros for a coffee.
In the supermarket, 2.5 kg of potatoes will cost you about 4 euros, 1 kg of tomatoes or apples 3 euros. One kg of minced beef will cost 17 euros, 1 litre of milk 80 cents and a box of 12 eggs about 3 euros. You will find the shampoo bottle at 4 euros and the shower gel at 2 euros.
Some products are cheaper than in neighbouring countries. This is the case with alcohol (1 bottle of crémant of 75 cl is at 7 euros). Tobacco costs 5 euros per pack. This is also the case for fuels. A litre of petrol will cost you about 1.2 euro/litre, while 1 litre of diesel will cost 1.05 euro/litre.
Luxembourg is the first country in the world to introduce free public transport in 2020.
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