Luxembourg
Make employment in Luxembourg easy. Let us handle payroll, benefits, taxes, compliance, and even stock options for your team in , all in one easy-to-use platform.
- Capital city
Luxembourg City
- Currency
Euro (€, EUR)
- Languages
Luxembourgish, German, and French
- Population size
626,108
Facts & Stats
- Capital city
Luxembourg City
- Currency
Euro (€, EUR)
- Languages
Luxembourgish, German, and French
- Population size
626,108
- Ease of doing business
Easy
- Cost of living index
88.28 (2021)
- Payroll frequency
Monthly
- VAT - standard rate
17%
- GDP - real growth rate
2.3 (2019)
Since its founding in 963 AD, Luxembourg (Luxembourgish: Grossherzogtum Lëtzebuerg) has enjoyed an exotic history that’d rival anything out of a history book: it’s changed ownership at least four times, produced four Holy Roman Emperors, and ruled over much of what is now Germany.
In modern times, Luxembourg boasts a developed economy with the world largest GDP per capita ranking, the 23rd highest human development index in the world, significantly low levels of inequality, and widespread civil and press freedoms.
Grow your team in Luxembourg with Remote
Looking to employ workers in Luxembourg? Companies hiring in Luxembourg must either own a legal entity in the country or work with a global employment solutions provider, usually one that provides employer of record services.
Remote can employ your team in Luxembourg on your behalf through our local legal entity in the country and handle payroll, benefits, taxes, and compliance for your Luxembourg team. You can also pay contractors now in Luxembourg with Remote.
Risks of misclassification
Luxembourg, like many other countries, treats self-employed individuals or contractors and full-time employees differently. Misclassification of contractors in Luxembourg may lead to fines and penalties for the offending company.
Employing in Luxembourg
Labor relations in Luxembourg are regulated by the Labor Code of 2006, and a number of European and international statutes that Luxembourg is signatory to.
Luxembourg’s workforce of over 487,000 enjoy protections against discrimination based on age, religion, sexual orientation, gender expression, and race.
Common questions that could come up during the hiring process include minimum wage, overtime rates, and guaranteed paid time off. Remote can help you offer a complete, competitive, and compliant benefits package to your employees in Luxembourg.
Minimum Wage
The government-mandated minimum wage in Luxembourg is fixed to correspond with the general price level & gets reviewed every two years. Following the latest review earlier this year, the Luxembourgish minimum wage has been increased by 2.8% and is currently set at:
€ 2,201.93 per month for non-graduate workers
€ 2,642.32 per month for graduate workers with appropriate certifications
Payroll Cycle
For customers of Remote, all employee payments will be made in equal monthly installments on or before the last working day of each calendar month, payable in arrears.
Onboarding Time
We can help you get a new employee started in Luxembourg fast. The minimum onboarding time we need is only 3 working days.
Our team ensures your employees are onboarded and paid as quickly as possible while keeping your business compliant with all local employment legislation. The minimum onboarding time begins after the employee submits all required information onto the Remote platform. The onboarding timeline is also dependent upon registration with local authorities.
For all non-nationals of the country of employment, the Right to Work assessment (if applicable) will add three extra days to the total time to onboard. There may be extra time required if we need to follow-up on the right to work assessment.
Please note, payroll cut-off dates can impact the actual first day of employment. Remote has a payroll cut-off date of the 10th of the month unless otherwise specified.
11 Public holidays
Competitive benefits package in Luxembourg
At Remote, we’re obsessed with helping you craft the best possible employee experience for your team. We are leading the way in practicing “fair equity,” which means making sure employees everywhere have access to both the required and supplemental benefits they need to thrive (and that will allow you to attract the best local talent).
Our benefits packages in Luxembourg are tailored to fulfill the local needs of your employees. Typically, our packages contain some or all of the following benefits:
Health Insurance
Dental Insurance
Vision Insurance
Mental Health Support
Pension or 401(K)
Life and Disability Insurance
Taxes in Luxembourg
Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in Luxembourg.
12.04 - 14.99%
Social security contribution
Types of Leave
Employees are entitled to 2.167 days off for every month worked, amounting to a minimum of 26 days of paid leave annually.
Employment termination
Termination process
Employee contracts can be terminated if a reasonable just cause is established, such as dishonesty, negligence, fraud, or any other work-related offenses. That aside, notice should be provided in advance – provided both parties agree to it.
Notice period
The required notice period in Luxembourg also depends on the length of employment:
Less than 5 years of employment: 2 months’ notice
5-10 years of employment: 4 months’ notice
10+ years of employment: 6 months’ notice
Severance pay
Without the appropriate termination notice, employees are entitled to receive a severance package equivalent to one month’s salary multiplied by the number of years the worker has stayed with the employer, up to 25 years.
Less than 5 years-: No severance pay
5-10 years: 4 months’ severance pay or the notice period can be extended by 5 months for employers with less than 20 employees
10-15 years: 2 months’ severance pay or the notice period can be extended by 8 months for employees with less than 20 employees
15-20 years: 3 months’ severance pay or the notice period can be extended by 9 months for employers with less than 20 employees
20-25 years: 6 months’ severance pay or the notice period can be extended by 12 months for employers with less than 20 employees
25-30 years: 9 months’ severance pay or the notice period can be extended by 15 months
30+ years: 12 months’ severance pay or the notice period can be extended by 18 months.