Remote’s guide to employing in Luxembourg.
(est. January 2020)
Luxembourgish, German, French
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.
Luxembourgish, German, French
626,108 (est. January 2020)
Ease of doing business
Cost of living index
VAT - standard rate
GDP - real growth rate
Remote currently offers contractor payment and management services in Luxembourg. We are busy building our own entity in the country to provide you with best possible employment solutions for your employees.
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.
|Saturday, January 1, 2022||New Year's Day|
|Tuesday, April 5, 2022||Easter Monday||Changes anually|
|Sunday, May 1, 2022||Labor Day|
|Monday, May 9, 2022||Europe Day|
|Friday, May 13, 2022||Ascension Day|
|Tuesday, May 24, 2022||Whit Monday|
|Thursday, June 23, 2022||National Day|
|Monday, August 15, 2022||Assumption of Mary|
|Tuesday, November 1, 2022||All Saints' Day|
|Sunday, December 25, 2022||Christmas Day|
|Monday, December 26, 2022||St Stephen's Day|
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:
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.
Remote can help you provide a competitive and compliant benefits package for your employees in Luxembourg. If you have questions or would like to offer a custom benefit, let us know and we can help.
Learn how employment taxes affect your payroll and your employees’ paychecks in Luxembourg.
12.04 - 14.99% - Social security contribution
(capped to a max. salary of €128,519.64)
8% - pension contribution
2.8 - 3.05% - sickness benefit contribution
1.4% - dependence insurance charged on monthly wages, less €535.50 per month
0% - Up to €11,265
8% - €11,265 - 13,173
10% - €13,173 - 15,081
12% - €15,081 - 16,989
14% - €16,989 - 18,897
16% - €18,897 - 20,805
18% - €20,805 - 22,713
20% - €22,713 - 24,621
22% - €24,621 - 26,529
24% - €26,529 - 28,437
26% - €28,437 - 30,345
28% - €30,345 - 32,253
30% - €32,253 - 34,161
32% - €34,161 - 36,069
34% - €36,069 - 37,977
36% - €37,977 - 39,885
38% - €39,885 - 41,793
39% - €41,793 - 100,000
40% - €100,002 - €150,000
41% - €150,000 - €200,004
42% - €200,004+
Employees are entitled to 2.167 days off for every month worked, amounting to a minimum of 26 days of paid leave annually.
Luxembourgish employees are entitled to take the 11 public holidays off work. If required to work on a public holiday, employees may be entitled to up to 300% of the normal wages with compensatory time off offered.
Sick employees are entitled to their full wages paid by the employer for the 77 days (or the end of the month after the 77th day of illness elapses) after which an employee will draw sickness benefits from the Caisse Nationale de Santé equivalent to 100% of the normal wages, without exceeding 500% of the minimum wage, i.e. roughly capped at ~€12,000 per month.
Female employees are entitled to 20 weeks of maternity leave, starting eight weeks before delivery and lasting until 12 weeks postpartum, and compensated at a rate equivalent to their normal wage, capped at five times the minimum wage, i.e. roughly ~€12,000 per month.
In addition to the statutory maternity benefits, pregnant and postpartum employees are entitled to enjoy exemption from hazardous work, dismissal following maternity, and any obligations to work overtime or night shifts.
Fathers are entitled to 10 days of paid paternity leave financed by the employer. Employees are entitled to parental leave ranging from four to six months following each new birth into their family, which can be exercised until their child turns six, or 12, if the latter is adopted.
This parental leave entitlement can be split into:
Employees can take 80 days of career development leave over the course of their professional career, compensated at the full pay rate. This study leave entitlement can be split over the course of an employee’s tenure with an employer, but must be exercised as laid out below:
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.
The required notice period in Luxembourg also depends on the length of employment:
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.