Grow your team in Luxembourg with Remote
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.
Facts & stats
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.
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.
|Date||Holiday Name||Extra information|
|New Year’s Day|
|Grand Duke's Official Birthday|
|Assumption of Mary|
|All Saints’ Day|
|Saint 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:
- € 2,201.93 per month for non-graduate workers
- € 2,642.32 per month for graduate workers with appropriate certifications
- For customers of Remote, all employee payments will be made in equal monthly instalments on or before the last working day of each calendar month, payable in arrears.
Competitive benefits package in Luxembourg
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.
Taxes in Luxembourg
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
Personal income tax rates
- 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+
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.
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:
- eight to 12 months, during which the parents’ working hours are halved,
- 20 months, over which the employee’s working hours are reduced by 20%, or
- Four one-month periods split over the course of 20 months
& training leave
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:
- 20 days maximum over the course of two years
- Minimum 1 day at a time
- Bereavement leave: employees are entitled to three days of paid leave for the death of any 1st degree relative, partner, or spouse, or five days in the event of a minor child’s death.
- Hospitalization leave: parents are entitled to time off work to care for their sick children, ranging from 12 days for children aged between 0 and four, 18 days for children between the ages of four and 13, and just five days off for young adult aged between 13 and 18.
- Adoption: adoptive parents of children under the age of 16 are entitled to leave equivalent that accorded to natural parents.
- Marriage: employees are entitled to take three days off to attend to their marriage rites (and one day in the instance of a civil partnership ceremony).
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:
- Less than 5 years of employment: 2 months’ notice
- 5-10 years of employment: 4 months’ notice
- 10+ years of employment: 6 months’ notice
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.
Probation periods can last anywhere from two weeks to 12 months long.