Luxembourg, officially the Grand Duchy of Luxembourg, is one of the world’s smallest countries but ranks among the world’s highest in its standard of living and per capita income. It covers an area of 2,586 km2, and is bordered by Belgium on the west and north, France on the south, and Germany on the northeast and east. Information technology, electronic commerce, international banking, and financial services are among the key industries of Luxembourg’s economy.
*Please note that the official currency is the currency of remuneration when employed through WorkMotion in Luxembourg.
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Capital :
Luxembourg City
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Currency :
Euro (€, EUR)
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Languages spoken :
Luxembourgish, German, and French
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Population :
630,070 (2021 est.)
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Minimum wage 2023 :
€3,009.88 (Monthly)
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Cost of Living index :
$$$ (13 of 139 nations)
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Payroll Frequency :
Monthly
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VAT - standard rate :
17%
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GDP - real growth rate :
6.9% (2021 est.)
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The holidays mentioned below are valid for the year 2024.
The approximate time for sharing the contract with an employee in Luxembourg is 14 business days assuming no special requests or changes to our standard employment contract. Any such requests or changes would need to undergo internal and external review, directly leading to a time delay.
NOTE: This number is subject to change and is only an estimation of the Contract Sharing Time. The estimated Contract Sharing Time begins from the moment that WorkMotion has received all required information from both the client and the employee.
Working time may not exceed eight hours per day and 40 hours per week. The maximum working time may not exceed 10 hours per day, 48 hours per week.
Overtime must not exceed two hours per day under any circumstances. It is either compensated by paid rest time, at the rate of 1.5 hours of paid rest time per hour of overtime worked, or recorded at the same rate in a time savings account.
The following table summarizes the applicable statutory probation periods:
| Employee Classification | Probation Period |
| Regular employees | At least 2 weeks and at most 6 months |
| Employees who do not have a vocational skills certificate (Certificat d’Aptitude Technique et Professionnelle) or vocational diploma (Diplôme d’Aptitude Professionnelle) and its equivalent | Maximum of 3 months |
| Employees who have a vocational skills certificate (Certificat d’Aptitude Technique et Professionnelle) or vocational diploma (Diplôme d’Aptitude Professionnelle), or its equivalent, or a higher level of training | Maximum of 6 months |
| Employees who receive a gross monthly salary of at least €536 or more at the index value of 100 (i.e. €4,700.77 at the current index value) | Maximum of 12 months |
The termination notice periods depend on the contract stage (during or after probation), contract length, and employees’ length of continuous employment as follows:
| Contract Stage | Service Length* | Employer Notice Period | Employee Notice Period* |
| During Probation Stage | 2 weeks | Cannot be terminated except for serious misconduct | Cannot be terminated except for serious misconduct |
| 3 weeks | 3 days | 3 days | |
| 4 weeks | 4 days | 4 days | |
| 2 months | 15 days | 15 days | |
| 3 months | 15 days | 15 days | |
| 4 months | 16 days | 16 days | |
| 5 months | 20 days | 20 days | |
| 6 months | 24 days | 24 days | |
| 7 months | 28 days | 28 days | |
| 8 month | 1 month | 1 month | |
| 9 months | 1 month | 1 month | |
| 10 months | 1 month | 1 month | |
| 11 months | 1 month | 1 month | |
| 12 months | 1 month | 1 month | |
| After Probation Stage* | Less than 5 years | 2 months | 1 month |
| At least 5 years and less than 10 years | 4 months | 2 months | |
| 10 years and above | 6 months | 3 months |
*NOTE: The probation period not exceeding one month must be expressed in whole weeks, and the probation period exceeding one month must be expressed in whole months.
Employees are entitled to an annual leave of at least 26 working days. The right to leave arises after three months of uninterrupted work with the same employer. For each day of leave, the employee is entitled to compensation equal to the average daily salary of the three months immediately preceding the beginning of the leave.
An employee is entitled to up to 26 weeks of sick leave per year provided they submit to the employer a medical certificate attesting to their incapacity for work and its foreseeable duration.
In the event of an employee’s incapacity for work, the employer is obliged to continue paying the salary until the end of the month in which the 77th day of incapacity for work is reached, calculated over a reference period of 18 consecutive months.
Each parent is entitled to full-time parental leave of four or six months per child as long as the children have not reached the age of six, following the birth or adoption of one or more children. The limit of six years of age is extended to 12 for parents of one or more adopted children.
During parental leave, the parent is entitled to an allowance equal to the employee’s average monthly income with a ceiling of €3,855.63 per month to replace their salary, granted by the National Fund for Family Allowances.
The pregnant employee is entitled to a compulsory maternity leave of eight weeks before the presumed date of delivery and 12 weeks following the delivery.
During maternity leave, the employee receives an allowance equal to their salary capped at five times the minimum wage from the health insurance fund.
Paternity leave (Pappecongé) is a special leave of 10 days granted to the father on the birth of a child within two months of the child being born or upon the arrival of an adopted child younger than 16 years of age.
The State covers the costs for paternity leave from the third day onwards. The salary reimbursement is capped at five times the minimum wage.
In the event of adoption by two spouses of a child who has not reached the age of 12, the parent is entitled to a leave for a period of 12 weeks.
An employee on adoption leave receives from the National Health Fund an allowance equivalent to 100% of their salary capped at five times the social minimum wage.
The employee is entitled to fully paid extraordinary leave by the employer under the following circumstances:
| Types of Extraordinary Leaves | Leave Length |
| Death of the spouse or partner or of a relative in the 1st-degree of the employee or of their spouse or partner (parents, parents-in-law, children, and children-in-law) | 3 days |
| Death of a relative in the 2nd-degree of the employee or their spouse or partner (grandparents, grandchildren, brothers, sisters, brothers-in-law, and sisters-in-law) | 1 day |
| Marriage of a child | 1 day for each parent |
| Special leave for moving, which is granted only once over a 3-year period with the same employer unless the employee has to move for professional reasons | 2 days |
| Wedding | 3 days |
| Declaration of the employee’s partnership | 1 day |
| Adoption or fostering of a child under 16 years old unless the worker already takes the adoption leave of 12 weeks | 10 days |
| Death of a minor child | 5 days |
An employee wishing to take long-term training may obtain unpaid leave for this purpose. The cumulative duration of unpaid leave per employee is set at a maximum of two years per employer:
The Luxembourg social security system is a single unified system.
The affiliation provides cover for the employee for:
Employers’ contribution to the social security system ranges between 12.54% and 14.92% as summarized in the table below:
| Benefits | Employer Contributions |
| Pension (Pension) | 8% |
| Sickness care (Maladie – soins de santé) | 2.8% |
| Sickness cash (Maladie – prestations en espèces) | 0.25% |
| Long-term care insurance (Dépendance) | – |
| Accident Insurance (Accident) | 0.75% |
| Occupational Health (Santé au travail) | 0.14% |
| Employers’ Mutual Funds (Mutualité des Employeurs) |
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As of April, 2023, the minimum contribution base is €2,508.24, while the maximum contribution base is 12,541.18.
Employers and employees each contribute a total of 3.05% towards health insurance.
The CNS provides coverage in:
Employees’ accident insurance contributions are entirely borne by the employer via a single contribution rate, which is 0.75% as of 2023.
Accident insurance covers accidents sustained while at work, traveling to and from work, and occupational diseases. To qualify for benefits, the employee must be assessed with a work injury or occupational disease listed by the Accident Insurance Association. The employer must also declare any accident to the AAA by providing it with all the information requested on the prescribed forms.
The employer does not contribute towards unemployment insurance. However, involuntarily unemployed salaried workers can claim unemployment benefits from the Employment Fund under certain conditions.
Employers, employees, and the State each contribute 8% to the general pension insurance scheme respectively.
The Fund covers:
The retirement age is 65 years old.
Employers are required to contribute to this fund at four different rates depending on their classification based on their “financial absenteeism rate.”
The employer solely bears contributions to occupational health insurance at a rate of 0.14%.
A person who is no longer able to carry out their essential life activities entitled to receive dependency benefits, paid by social security.
The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. WorkMotion Software GmbH disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.
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