Talent Wiki - Luxembourg
Your quick guide on talent and labor compliance norms in Luxembourg
Capital
Luxembourg
Currency
Euro (EUR)
Languages
Luxembourgish, French, German
Payroll Frequency
Weekly, Monthly
GDP per Capita
$127,672
Employer Tax
14.085 - 14.535%
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
Local Universities
Top local university in Luxembourg is;
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 | 8,250.00 | 8,860 |
| Network Engineer | 4,420.00 | 4,747 |
| Developer / Programmer | 5,000.00 | 5,370 |
| Project Manager | 5,630.00 | 6,046 |
| Database Administrator | 4,810.00 | 5,165 |
| Business Analyst | 6,380.00 | 6,852 |
| Business Development Manager | 7,680.00 | 8,248 |
Talent Sourcing Tips
Top Local Job Boards:
Jobs.lu, Eures Luxembourg, ictjob.lu
Number of LinkedIn users:
337, 000
Top Recruitment Agencies:
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 1 year.
Public and Provincial Holidays
| Date | Holiday | Type |
| 1 Jan | New Year’s Day | National Holiday |
| 10 Apr | Easter Monday | National Holiday |
| 1 May | Labour Day | National Holiday |
| 9 May | Europe Day | National Holiday |
| 18 May | Ascension Day | National Holiday |
| 29 May | Whit Monday | National Holiday |
| 23 Jun | National Day | National Holiday |
| 15 Aug | Assumption Day | National Holiday |
| 1 Nov | All Saints’ Day | National Holiday |
| 25 Dec | Christmas Day | National Holiday |
| 26 Dec | 2nd Day of Christmas | 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 |
Payroll
Payroll Cycle
Workers are paid weekly and monthly.
Minimum Wage
The minimum wage in Luxembourg ranges from 2,313.38 to 2,776.05 EUR per month.
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:
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
Taxes
Employer Payroll Tax
| Contributions | Rate (%) |
| Health insurance | 3.05 |
| Pension Insurance | 8.0 |
| Family benefits | 1.4 |
| Occupational health | 0.25 |
| Workplace accident | 0.675 – 1.125 |
| Employers’ mutual insurance (variable rate) | 0.46 |
| Surcharge for cash compensation | 0.25 |
| Total | 14.085 – 14.535 |
Employee Payroll Tax
| Contributions | Rate (%) |
| Health insurance | 3.05 |
| Pension Insurance | 8 |
| Long-term care insurance | 1.4 |
| Surcharge for cash compensation | 0.25 |
| Total | 12.7 |
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)
| Taxable Salaried Income (EUR) | Income tax with solidarity tax (EUR) | ||
| Class 1 | Class 1a | Class 2 | |
| 20,000 | 921 | 0 | 0 |
| 38,700 | 5,317 | 4,271 | 1,675 |
| 58,000 | 13,081 | 12,325 | 5,113 |
| 77,400 | 21,177 | 20,420 | 10,635 |
| 96,700 | 29,231 | 28,474 | 18,110 |
| 116,00 | 37,456 | 36,699 | 26,164 |
| 135,500 | 45,802 | 45,045 | 34,302 |
| 155,000 | 54,242 | 53,486 | 42,439 |
| 205,000 | 76,642 | 75,855 | 63,357 |
VAT
The standard VAT in Luxembourg is 17% (14%, 8%, 3%) depending on the product or type of service.
Offboarding & Termination
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.
