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.

Capitale :
Luxembourg City
Devise :
Euro (€, EUR)
Langues parlées :
Luxembourgish, German, and French
Nombre d'habitants :
630,070 (2021 est.)
Salaire minimum :
€2,313.38 (Monthly)
Index du coût de la vie :
$$$ (13 of 139 nations)
Payroll Frequency :
Monthly
Taux normal de la TVA :
17%
Croissance réelle du PIB :
6.9% (2021 est.)

Statutory Holidays

The holidays mentioned below are valid for the year 2022.

Date
Holiday Name
Extra Information
January 1
New Year’s Day
April 18
Easter Monday
Movable
May 1
Labor Day
Sunday*
May 9
Europe Day
May 26
Ascension Day
Movable
June 6
Whit Monday
Movable
June 23
Grand Duke's Birthday
August 15
Assumption
November 1
All Saints Day
December 25
Christmas Day
Sunday* and 1st day of Christmas
December 26
Boxing Day
2nd day of Christmas

Contract Sharing Time


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.

What You Need To Know


  • The maximum duration of the probation period is based on an employee’s qualification or salary level.
  • The employer is required to send the termination notice to the employee by registered mail or by hand-delivering to the employee, who must sign a receipt or a duplicate of the letter in acknowledgment.
  • When the consumer price index increases or decreases by 2.5% during the previous semester, salaries are normally adjusted by the same proportion.
  • An employer employing less than 20 employees may opt, in the letter of dismissal, either for the payment of severance or for the extension of the notice periods.
  • Luxembourg’s remote working legislation for the financial sector is effective as of July 2022.

Labor Conditions


Working Hours

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

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.

Probation Period

The following table summarizes the applicable statutory probation periods:

Employee ClassificationProbation Period
Regular employeesAt 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 equivalentMaximum 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 trainingMaximum 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
Termination Notice Period

The termination notice periods depend on the contract stage (during or after probation), contract length, and employees’ length of continuous employment as follows:

Contract StageService Length*Employer Notice PeriodEmployee Notice Period*
During Probation Stage2 weeksCannot be terminated except for serious misconductCannot be terminated except for serious misconduct
3 weeks3 days3 days
4 weeks4 days4 days
2 months15 days15 days
3 months15 days15 days
4 months16 days16 days
5 months20 days20 days
6 months24 days24 days
7 months28 days28 days
8 month1 month1 month
9 months1 month1 month
10 months1 month1 month
11 months1 month1 month
12 months1 month1 month
After Probation Stage*Less than 5 years2 months1 month
At least 5 years and less than 10 years4 months2 months
10 years and above6 months3 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.

Leave / Time Off

Annual Leave

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.

Sick 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.

Parental Leave

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.

Maternity Leave

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 (€11,566.9 in 2022) from the health insurance fund.

 

Paternity Leave

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.

 

Adoption Leave

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 (€11,566.9 in 2022).

Other Types of Paid Leave

The employee is entitled to fully paid extraordinary leave by the employer under the following circumstances:

Types of Extraordinary LeavesLeave 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 child1 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 reasons2 days
Wedding3 days
Declaration of the employee’s partnership1 day
Adoption or fostering of a child under 16 years old unless the worker already takes the adoption leave of 12 weeks10 days
Death of a minor child5 days

Unpaid Leave

Unpaid Training Leave

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 minimum duration of the leave is four consecutive calendar weeks;
  • The maximum duration of the leave is six consecutive months.

Statutory Benefits

The Luxembourg social security system is a single unified system.

The affiliation provides cover for the employee for:

  • Sickness;
  • Family allowances;
  • Pension benefits;
  • Long-term care benefits;
  • Accident insurance;
  • Occupational health, etc.

Employers’ contribution to the social security system ranges between 12.54% and 14.92% as summarized in the table below:

BenefitsEmployer 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)
  • 0.60% (Class 1)
  • 1.13% (Class 2)
  • 1.66% (Class 3)
  • 2.98% (Class 4)

Health Insurance

Employers and employees each contribute a total of 3.05% towards health insurance. 

The CNS provides coverage in:

  • Payments in kind (reimbursement of health care paid for by the insured person);
  • Payments in cash (maternity allowance, sickness benefit after the continuation of salary payments (‘Lohnfortzahlung‘), funeral payments);
  • Long-term care insurance.

Other Insurances

Accident Insurance

Employees’ accident insurance contributions are entirely borne by the employer via a single contribution rate, which is 0.75% as of 2022.

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.

Unemployment Insurance

The employer does not contribute towards unemployment insurance. However, involuntarily unemployed salaried workers can claim unemployment benefits from the Employment Fund under certain conditions.

Public Pension

Employers, employees, and the State each contribute 8% to the general pension insurance scheme respectively.

The Fund covers:

  • Old-age pensions (Pensions De Vieillesse);
  • Disability pensions (Pension D’invalidité);
  • Survivors’ pensions (Pension De Survie).

The retirement age is 65 years old.

Other Statutory Benefits

Employers’ Mutual Funds

Employers are required to contribute to this fund at four different rates depending on their classification based on their “financial absenteeism rate” as follows:

Financial Absenteeism RateClassEmployer Contributions
Less than 0.65%10.60%
Greater than or equal to 0.65% and less than 1.60%21.13%
Greater than or equal to 1.60% and less than 2.50%31.66%
Greater than or equal to 2.50%42.98%
Occupational Health Insurance

The employer solely bears contributions to occupational health insurance at a rate of 0.14%.

Long-term Care Insurance

A person who is no longer able to carry out their essential life activities entitled to receive dependency benefits, paid by social security.

Disclaimer

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.

Information provided in this Country Guide is provided “as is” without warranty of any kind, either express or implied, including without limitation warranties of merchantability, fitness for a particular purpose, or non-infringement. WorkMotion Software GmbH periodically adds, changes, improves, updates, or removes information without notice, and assumes no liability or responsibility for any errors or omissions in the contents of this Country Guide. This Country Guide may contain links to other websites. WorkMotion Software GmbH disclaims all liability for the privacy practices or the content of such websites.

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