Expand your global workforce in Luxembourg
Your guide to the employment landscape, working customs and local labor laws in Luxembourg
Capital
Luxembourg
Currency
Euro (EUR)
Languages
Luxembourgish, French, German
GDP per Capita
$134,989.82
Employer Tax
14.085 - 14.535%
Payroll Frequency
Weekly, Monthly
Talent overview
Luxembourg is a landlocked country surrounded by Belgium, Germany, and France. The country’s economy is the fifth freest in the world and the 3rd highest economy in Europe. The financial sector is the highest contributor to the country’s economy, with 36% of its total GDP, followed by industry with 13.3%. Luxembourg is also called the “Green Heart of Europe” as its tourism moniker which contributes to their economy as well.
Major economic hubs:
Luxembourg
Skills in demand:
ICT Professionals, Legal Professionals, Financial Professionals
Luxembourg
Top local universities in Luxembourg
Top Local Job Boards:
Jobs.lu, Eures Luxembourg, ictjob.lu
Number of LinkedIn users:
363,000
Top Recruitment Agencies:
Where to find talent
Top Local Job Boards:
Top Local Job Boards
Number of LinkedIn users:
Number of LinkedIn users
Top Recruitment Agencies:
Top Recruitment Agencies:
Salary Data
The table contains some of the common jobs in Luxembourg with average monthly salary:
| Job Title | Average Monthly Salary (EUR) | Average Monthly Salary (USD) |
| Information Technology Manager | 8,250 | 9,256 |
| Network Engineer | 4,420 | 4,959 |
| Developer / Programmer | 5,000 | 5,370 |
| Project Manager | 5,630 | 6,046 |
| Database Administrator | 4,810 | 5,165 |
| Business Analyst | 6,380 | 6,852 |
| Business Development Manager | 7,680 | 8,248 |
Employ in Luxembourg
Employing in Luxembourg
Hiring in Luxembourg requires you to be aware of the local employment laws, benefits, payroll, and taxes. Given below is everything you need to know on how to successfully onboard talents from Luxembourg.
Employee Contract
The employment contract can be written in any language provided that it is understood by the employee.
Probation Period
The probationary period for new employees ranges from 2 weeks to 6 months.
Public and Provincial Holidays
| Date | Name | Type |
| January 1 | New Year’s Day | National Holiday |
| April 18 | Good Friday | National Holiday |
| April 21 | Easter Monday | National Holiday |
| May 1 | Labor Day / May Day | National Holiday |
| May 9 | Europe Day | National Holiday |
| May 29 | Ascension Day | National Holiday |
| April 18 | Good Friday | Local Holiday |
| June 9 | Whit Monday | National Holiday |
| June 23 | National Day | National Holiday |
| August 15 | Assumption of Mary | National Holiday |
| November 1 | All Saints’ Day | National Holiday |
| December 25 | Christmas Day | National Holiday |
| December 26 | St Stephen’s Day | National Holiday |
Employee Leaves
| Type of leave | Time period | Mandatory |
| Annual leave/Earned Leave | 26 days | Yes |
| Maternity Leave | 20 weeks | Yes |
| Sick Leave | 3 – 8 days | Yes |
Leave Compliance
Public and Provincial Holidays
Payroll in Luxembourg
Payroll cycle
Workers are paid weekly and monthly.
Minimum wage
The minimum wage in Luxembourg ranges from EUR 2,570.93 per month.
Read more
Overtime pay
Overtime in Luxembourg is compensated by time off in lieu. This means 1.5 hours of time off per hour of overtime worked.
However, there are two reasons for monetary payment for overtime to employees:
Read more
How taxes work
Employer Payroll Tax
| Scheme | Employer’s
contribution |
| Health insurance | Benefits in cash: 0.25%
Benefits in kind: 2.80% |
| Pension insurance | 8% |
| Long-term care insurance | – |
| Accident insurance | 0.9% |
| Occupational health | 0.14% |
| Mutual insurance scheme | Depends on the contribution class to which the business belongs |
Employee Payroll Tax
| Scheme | Employee’s
contribution |
| Health insurance | Benefits in cash: 0.25%
Benefits in kind: 2.80% |
| Pension insurance | 8% |
| Long-term care insurance | 1.4% |
| Accident insurance | – |
| Occupational health | – |
| Mutual insurance scheme |
Employee Income Tax
*Class 1 – Single
*Class 1a – Single with children and single tax payers aged at least 65 years old
*Class 2 – Married or civil partners
**Solidarity tax is 7% (9% for taxpayers earning more than EUR 150,000 in class 1 and 1a or EUR 300,000 in class 2)
The income tax rates for Class 1 taxpayers are as follows:
| Annual Taxable Income (EUR) | Tax Rates |
| 0 to 12,438 | 0% |
| 12,438 to 14,508 | 8% |
| 14,508 to 16,578 | 9% |
| 16,578 to 18,648 | 10% |
| 18,648 to 20,718 | 11% |
| 20,718 to 22,788 | 12% |
| 22,788 to 24,939 | 14% |
| 24,939 to 27,090 | 16% |
| 27,090 to 29,241 | 18% |
| 29,241 to 31,392 | 20% |
| 31,392 to 33,543 | 22% |
| 33,543 to 35,694 | 24% |
| 35,694 to 37,845 | 26% |
| 37,845 to 39,996 | 28% |
| 39,996 to 42,147 | 30% |
| 42,147 to 44,298 | 32% |
| 44,298 to 46,449 | 34% |
| 46,449 to 48,600 | 36% |
| 48,600 to 50,751 | 38% |
| 50,751 to 110,403 | 39% |
| 110,403 to 165,600 | 40% |
| 165,600 to 220,788 | 41% |
| 220,788 and above | 42% |
VAT
The standard VAT in Luxembourg is 17% (14%, 8%, 3%) depending on the product or type of service.
Bonus
13th Month Pay
The 13th-month pay is customary in Luxembourg and is generally paid at the end of the year.
Employee Benefits
Full-time employees in Luxembourg are ensured to have insurance benefits such as
- Pension and disability insurance
- Health Insurance
- Family Benefits
- Long-term care insurance
- Accident Insurance
- Travel Allowance
- Take home car
- Dental and vision insurance
Employee offboarding
Employers in Luxembourg must cite at least one or two reasons for valid termination. These can include personal (e.g. employee’s nature) or business requirements (e.g. operations). Organizations with more than 150 employees must go through a pre-dismissal interview according to the labor code.
For employers with at least 15 employees, the organization must notify the Economic Committee for reasons that do not include the employee’s person.
The notice period before termination for probationary and regular employees ranges from 2 months to 6 months.
Employees are entitled to severance pay with at least five years of continuous service. The table below represents the amount paid in terms of tenure for the severance pay.
| Years | Amount (monthly salary) |
| 5 – 10 years | 2 |
| 10 – 15 years | 3 |
| 15 – 20 years | 4 |
| 20 – 25 years | 6 |
| 25 – 30 years | 9 |
| >30 years | 12 |
Visa and
immigration
Business visas for Luxembourg are under the express authority of the European Union. Hence, the requirements for entry, travel, and work must be applied through the Schengen Visa.
Your employment toolkit for Luxembourg
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Overtime Pay
Minimum Wage
| Age | % | Gross Hourly Wage (EUR) | Gross Monthly Salary (EUR) |
|---|---|---|---|
| 18 and over
(unskilled) |
100 | 14.86 | 2,570.93 |
| 17-18 years old | 80 | 11.89 | 2,056.74 |
| 15-17 years old | 75 | 11.15 | 1,928.20 |
| 18 and over
(skilled) |
120 | 17.83 | 3,085.11 |
Overtime Pay
- Reasons inherent to the company
- Employee leaves before recovering the time off
The overtime pay is usually 140% of the employee’s hourly wage.
Visa and Immigration