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Euro is the official currency of Luxembourg Its currency symbol is €, EUR.
Estimated at 12.5% of employees salary
Language: Extremely multi-lingual – Luxembourgish, German, French and English.
The population of Luxembourg is 660,000
Employees are paid monthly
To start growing your team in Luxembourg you must establish a local entity – including an account with a local bank, a local office and an address registered as a subsidiary. This allows you to manage payroll, tax, benefits and compliance for your employees, but can take several months. Emerald can hire and payroll your workers quickly and compliantly with their ‘ready to go’ entity. Make growing your team simple with Emerald as a global partner.
Emerald can hire and payroll your workers, quickly and compliantly with their ready to go entity. Make growing your team simple with Emerald as a global partner.
Hiring employees in Luxembourg offers notable advantages but also comes with certain challenges. One advantage is access to a highly skilled and multilingual workforce, which is beneficial for international business operations. Luxembourg’s robust economy, favourable business climate, and strong legal protections create a stable environment for employers. The country’s central location in Europe provides strategic access to major European markets. In addition to this, Luxembourg is known for its wealth and stable economy, as it has the world’s highest rate of GDP per capita. However, challenges include high labour costs, as Luxembourg has one of the highest wage levels in Europe, which can impact overall expenses. Additionally, the regulatory framework can be complex, requiring careful navigation of labour laws and compliance requirements. While the multilingual skills of the workforce are an asset, employers might still face challenges with integrating employees into their organizational culture and managing diverse linguistic backgrounds.
Hiring remotely in Luxembourg offers several specific benefits. The country boasts a highly educated, multilingual workforce skilled in various fields such as finance, technology, and engineering, which can enhance your business capabilities without the need for a physical office. Luxembourg’s strong data protection laws and advanced digital infrastructure ensure secure and efficient remote work setups. Additionally, its central location in Europe provides a strategic time zone that aligns well with other major European markets, facilitating smooth communication and collaboration across borders. Furthermore, remote hiring can help mitigate the high cost of living and wage levels in Luxembourg, as you can tap into the local talent pool while potentially reducing overhead costs associated with maintaining a physical office.
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| Pension Insurance: | 8% |
| Health Insurance: | 3.05% |
| Long-Term Care Insurance: | 1.4% |
| Accident Insurance: | 0.05% to 0.1% (depends on the sector) |
Probation Period: Probation periods can last from 2 weeks to 6 months, this must be outlined in the employment contract.
Emerald Technology can onboard employees in Luxembourg within 48 hours.
Restrictive covenants in Luxembourg include non-compete clauses, non-solicitation clauses, and confidentiality agreements. Non-compete clauses must be limited in time (up to 12 months), geographical scope, and the nature of the restricted activities. Non-solicitation clauses prevent former employees from poaching clients or employees for a defined period. Confidentiality agreements protect sensitive company information during and after employment. These covenants must be reasonable and justified to be enforceable.
In Luxembourg, a universal public healthcare system is managed by the National Health Fund, funded by social security contributions in order to provide comprehensive coverage to residents and employees, including EU citizens. Employers contribute 2.8% of the employee’s gross salary towards health insurance. Employees also contribute 2.8% of their salary towards healthcare. This covers a substantial number of healthcare services including, hospitalization, emergency services and basic dental treatments.
Social security contributions are compulsory for employers and employees in Luxembourg to cover various benefits such as healthcare and pension insurance. Employers make several contributions based on the gross salary of each employee, and this is usually a total of around 15.58% of the employee’s gross salary. Employees contribute 13.9% of their gross salary to social security.
Pregnant employees receive 20 weeks of maternity leave, from 8 weeks before birth, with benefits provided by social insurance.
Fathers are entitled to up to 10 days of paternity leave on 100% of their pay. 2 days will be paid by the employer, and the following 8 funded by social security.
The parent can request:
During parental leave, the parent is entitled to an allowance paid by social security.
In Luxembourg, employees are entitled to up to 26 weeks of sick leave within a 12-month period. During the first 77 days of sick leave, employers must pay the full salary. After this period, the National Health Fund (CNS) takes over the payment. A medical certificate is required to validate the sick leave.
As the legal employer, Emerald Technology requires the following employee documents to ensure complete compliance:
When an employer dismisses an employee it must be with just cause and they must give them notice. The notice period starts from the day after the employer notifies the employee of the termination. Notice must be given in accordance with the following schedule at a minimum:
| Length of employment | Notice period |
| Less than 5 years | 2 months |
| 5 - 10 years service | 4 months |
| Over 10 years | 6 months notice |
If an employee is made redundant, they are entitled to a payment based on years of continuous service.
| Length of employment | Severance pay |
| Less than 5 years | No severance pay |
| 5-10 years | 1 month’s pay |
| 10-15 years | 2 months’ pay |
| 15-20 years | 3 months’ pay |
| 20-25 years | 6 months’ pay |
| 25-30 years | 9 months’ pay |
| 30+ years | 12 months’ pay |
Full time employees receive a minimum of 26 working days of annual leave, with additional days for certain categories of workers.
18.80 EUR per hour
The standard working week in Luxembourg is 40 hours – 5 days of 8 hours
Overtime: Overtime is capped at 2 hours a day, with a maximum of 8 hours per week. The employee should be paid at least 150% of their regular salary.
Monthly
In Luxembourg, the 13th-month salary is a mandatory annual bonus. Typically, it is paid at the end of the year, around December, and is equivalent to one month’s salary.
Annual Income (EUR) Tax Rate
0 – 11,265 0%
11,266 – 13,137 8%
13,138 – 15,009 9%
15,010 – 16,881 10%
16,882 – 18,753 11%
18,754 – 20,625 12%
20,626 – 22,497 14%
22,498 – 24,369 16%
24,370 – 26,241 18%
26,242 – 28,143 20%
28,144 – 30,009 22%
30,010 – 32,661 24%
32,662 – 35,315 26%
35,316 – 37,969 28%
37,970 – 40,641 30%
40,642 – 43,407 32%
43,408 – 46,174 34%
46,175 – 48,936 36%
48,937 – 51,708 38%
51,709 – 54,463 39%
54,464 – 57,232 40%
57,233 – 59,996 41%
59,997 – 62,752 42%
62,753 – 65,536 43%
65,537 and above 45.78%
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