How much can you earn on the side before paying tax?

Occasional jobs and freelance work: from what amount does your side income become taxable in Luxembourg? Find out, then declare it online with taxx.lu.

You sell your creations at the weekend. You get paid for the odd favour now and then. And a little voice starts up: is the tax office about to come knocking?

Good news: not necessarily, and not straight away. Luxembourg leaves real room for small extra earnings. You just need to know the two numbers that matter, and above all, not mix them up.

The number to remember: €500

Occasional income isn't taxable as long as it stays under €500 for the year.

This is what Luxembourg calls "miscellaneous income" (revenus nets divers): a one-off job, a small service here and there, a favour you got paid for. As long as the yearly total stays below the line, you pay nothing on it.

Same idea for so-called "speculative" gains. Buy something and sell it at a profit within six months (gig tickets, a limited-edition pair of trainers, a few shares), and you stay exempt as long as those gains add up to less than €500 over the calendar year.

Careful, though: it's a threshold, not an allowance. Under €500, it's exempt. Go over, and the amount generally becomes taxable.

"Occasional" is the word that changes everything

Here's the catch. That €500 only applies to genuinely occasional activity.

Once your side gig becomes regular and organised, it's no longer miscellaneous income. It counts as commercial profit or self-employed activity. And then there's no €500 threshold: it's taxable from the very first euro, with its own obligations.

The difference isn't the amount, it's the nature. Three sales in a year: occasional. An online shop open all year round: an activity. If you're selling regularly, assume it needs declaring.

The other number: €600

This one has nothing to do with the first, and it's where a lot of people slip up.

If, on top of your salary (already taxed at source), you receive more than €600 net a year in income that hasn't been taxed at source, you have to file a tax return, whatever your total income.

So:

• €500 is the threshold below which occasional income isn't taxed.
• €600 is the threshold above which you have to file a return.

Two numbers, two jobs. One decides whether it's taxed, the other decides whether you have to declare.

What counts as side income?

Beyond the occasional extra, several types of income land in the "not taxed at source, so keep an eye on it" bucket:

• Occasional services and sales (that miscellaneous income again).
• Rental income from a property (form 190).
• Capital gains, for example from selling a property (form 700).
• Self-employed or freelance work alongside your job.
• Income from abroad.

Once these add up to more than €600 net over the year, filing becomes mandatory.

So how is it actually taxed?

There's no special "side income tax". Once it's taxable, this income is simply added to the rest of your income, and the whole lot is taxed at your rate.

In other words, there's no fixed amount: the impact depends on your overall situation. And the final word always goes to the Administration des contributions directes (ACD), which does the maths and makes the call.

When in doubt

The line between "occasional" and "activity" isn't always clear-cut, and every situation is different.

A little side income is usually good news. Declared properly, it stays that way.