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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

$134,989.82

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

The top local universities in Luxembourg are as follows:

Université du Luxembourg (University of Luxembourg)

RANKING

Local: 1

World : 864

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

 

Talent Sourcing Tips

Top Local Job Boards:

Jobs.lu, Eures Luxembourg, ictjob.lu

Number of LinkedIn users:

363,000

Top Recruitment Agencies:

Robert Half, Hays, The Recruiter

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 Name Type
1 Jan New Year’s Day National holiday
29 Mar Good Friday Bank holiday
1 Apr Easter Monday National holiday
1 May Labor Day / May Day National holiday
9 May Ascension Day National holiday
9 May Europe Day National holiday
20 May Whit Monday National holiday
23 Jun National Day National holiday
15 Aug Assumption of Mary National holiday
1 Nov All Saints’ Day National holiday
24 Dec Christmas Eve Half Day Bank holiday
25 Dec Christmas Day National holiday
26 Dec 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

 

Payroll

Payroll Cycle

Workers are paid weekly and monthly.

Minimum Wage

The minimum wage in Luxembourg ranges from 2,837.40 to 2,936.48 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. 

Streamline payroll and compliance for your international workforce

Payroll

Minimum Wage

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 & Immigration