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Facts & Stats

Since its founding in 963 AD, Luxembourg (Luxembourgish: Grossherzogtum Lëtzebuerg​) has enjoyed an exotic history that’d rival anything out of a history book: it’s changed ownership at least four times, produced four Holy Roman Emperors, and ruled over much of what is now Germany.

In modern times, Luxembourg boasts a developed economy with the world largest GDP per capita ranking, the 23rd highest human development index in the world, significantly low levels of inequality, and widespread civil and press freedoms.

  • Capital city

    Luxembourg City

  • Currency

    (, EUR)

  • Languages spoken

    Luxembourgish, German, French

  • Population size

    626,108 (est. January 2020)

  • Ease of doing business


  • Cost of living index

    88.28 (2021)

  • Payroll frequency


  • VAT - standard rate


  • GDP - real growth rate

    2.3 (2019)

Grow your team in Luxembourg with Remote

Looking to employ workers in Luxembourg? Companies hiring in Luxembourg must either own a legal entity in the country or work with a global employment solutions provider, usually one that provides employer of record services.

Remote can employ your team in Luxembourg on your behalf through our local legal entity in the country and handle payroll, benefits, taxes, and compliance for your Luxembourg team. You can also pay contractors now in Luxembourg with Remote.

of misclassification

Luxembourg, like many other countries, treats self-employed individuals or contractors and full-time workers differently and there are risks associated with misclassification.

Employing in Luxembourg

Labor relations in Luxembourg are regulated by the Labor Code of 2006, and a number of European and international statutes that Luxembourg is signatory to.

Luxembourg’s workforce of over 487,000 enjoy protections against discrimination based on age, religion, sexual orientation, gender expression, and race.

Common questions that could come up during the hiring process include minimum wage, overtime rates, and guaranteed paid time off. Remote can help you offer a complete, competitive, and compliant benefits package to your employees in Luxembourg.

Public holidays

Below are national public holidays applicable for all regions in this country. Remote customers have access to a detailed list of regional public holidays within the Remote platform. Sign up now to access all public holiday information.

Minimum Wage

The government-mandated minimum wage in Luxembourg is fixed to correspond with the general price level & gets reviewed every two years. Following the latest review earlier this year, the Luxembourgish minimum wage has been increased by 2.8% and is currently set at:

  • € 2,201.93 per month for non-graduate workers
  • € 2,642.32 per month for graduate workers with appropriate certifications

Payroll Cycle

For customers of Remote, all employee payments will be made in equal monthly installments on or before the last working day of each calendar month, payable in arrears.

Onboarding Time

We can help you get a new employee started in Luxembourg fast. The minimum onboarding time we need is only 4 working days.

Our team ensures your employees are onboarded and paid as quickly as possible while keeping your business compliant with all local employment legislation. The minimum onboarding time begins after the employee submits all required information onto the Remote platform. The onboarding timeline is also dependent upon registration with local authorities.

For all non-nationals of the country of employment, the Right to Work assessment (if applicable) will add three extra days to the total time to onboard. There may be extra time required if we need to follow-up on the right to work assessment.

Please note, payroll cut-off dates can impact the actual first day of employment. Remote has a payroll cut-off date of the 10th of the month unless otherwise specified.

Competitive benefits package in Luxembourg

At Remote, we’re obsessed with helping you craft the best possible employee experience for your team. We are leading the way in practicing “fair equity,” which means making sure employees everywhere have access to both the required and supplemental benefits they need to thrive (and that will allow you to attract the best local talent).

Our benefits packages in Luxembourg are tailored to fulfill the local needs of your employees. Typically, our packages contain some or all of the following benefits:

  • Health Insurance
  • Dental Insurance
  • Vision Insurance
  • Mental Health Support
  • Pension or 401(K)
  • Life and Disability Insurance

Calculate the cost to hire an employee
in Luxembourg

Taxes in Luxembourg

Learn how employment taxes affect your payroll and your employees’ paychecks in Luxembourg.

  • Employer

    • 12.04 - 14.99% - Social security contribution

  • Employee

    • (capped to a max. salary of €135,417)

    • 8% - pension contribution

    • 2.8 - 3.05% - sickness benefit contribution

    • 1.4% - dependence insurance charged on monthly wages, less €535.50 per month

  • Personal income tax rates

    • 0% - Up to €11,265

    • 8% - €11,265 - 13,173

    • 10% - €13,173 - 15,081

    • 12% - €15,081 - 16,989

    • 14% - €16,989 - 18,897

    • 16% - €18,897 - 20,805

    • 18% - €20,805 - 22,713

    • 20% - €22,713 - 24,621

    • 22% - €24,621 - 26,529

    • 24% - €26,529 - 28,437

    • 26% - €28,437 - 30,345

    • 28% - €30,345 - 32,253

    • 30% - €32,253 - 34,161

    • 32% - €34,161 - 36,069

    • 34% - €36,069 - 37,977

    • 36% - €37,977 - 39,885

    • 38% - €39,885 - 41,793

    • 39% - €41,793 - 100,000

    • 40% - €100,002 - €150,000

    • 41% - €150,000 - €200,004

    • 42% - €200,004+

Types of leave

Paid time off

Employees are entitled to 2.167 days off for every month worked, amounting to a minimum of 26 days of paid leave annually.

Public holidays

Luxembourgish employees are entitled to take the 11 public holidays off work. If required to work on a public holiday, employees may be entitled to up to 300% of the normal wages with compensatory time off offered.

Sick leave

Sick employees are entitled to their full wages paid by the employer for the 77 days (or the end of the month after the 77th day of illness elapses) after which an employee will draw sickness benefits from the Caisse Nationale de Santé equivalent to 100% of the normal wages, without exceeding 500% of the minimum wage, i.e. roughly capped at ~€12,000 per month.

Maternity leave

Female employees are entitled to 20 weeks of maternity leave, starting eight weeks before delivery and lasting until 12 weeks postpartum, and compensated at a rate equivalent to their normal wage, capped at five times the minimum wage, i.e. roughly ~€12,000 per month.

In addition to the statutory maternity benefits, pregnant and postpartum employees are entitled to enjoy exemption from hazardous work, dismissal following maternity, and any obligations to work overtime or night shifts.

Paternity/Parental leave

Fathers are entitled to 10 days of paid paternity leave financed by the employer. Employees are entitled to parental leave ranging from four to six months following each new birth into their family, which can be exercised until their child turns six, or 12, if the latter is adopted.

This parental leave entitlement can be split into:

  • eight to 12 months, during which the parents’ working hours are halved,
  • 20 months, over which the employee’s working hours are reduced by 20%, or
  • Four one-month periods split over the course of 20 months

Education & training leave

Employees can take 80 days of career development leave over the course of their professional career, compensated at the full pay rate. This study leave entitlement can be split over the course of an employee’s tenure with an employer, but must be exercised as laid out below:

  • 20 days maximum over the course of two years
  • Minimum 1 day at a time

Other leave

  • Bereavement leave: employees are entitled to three days of paid leave for the death of any 1st degree relative, partner, or spouse, or five days in the event of a minor child’s death.
  • Hospitalization leave: parents are entitled to time off work to care for their sick children, ranging from 12 days for children aged between 0 and four, 18 days for children between the ages of four and 13, and just five days off for young adult aged between 13 and 18.
  • Adoption: adoptive parents of children under the age of 16 are entitled to leave equivalent that accorded to natural parents.
  • Marriage: employees are entitled to take three days off to attend to their marriage rites (and one day in the instance of a civil partnership ceremony).

Employment termination

Termination process

Employee contracts can be terminated if a reasonable just cause is established, such as dishonesty, negligence, fraud, or any other work-related offenses. That aside, notice should be provided in advance – provided both parties agree to it.

Notice period

The required notice period in Luxembourg also depends on the length of employment:

  • Less than 5 years of employment: 2 months’ notice
  • 5-10 years of employment: 4 months’ notice
  • 10+ years of employment: 6 months’ notice

Severance pay

Without the appropriate termination notice, employees are entitled to receive a severance package equivalent to one month’s salary multiplied by the number of years the worker has stayed with the employer, up to 25 years.

  • Less than 5 years-: No severance pay
  • 5-10 years: 4 months’ severance pay or the notice period can be extended by 5 months for employers with less than 20 employees
  • 10-15 years: 2 months’ severance pay or the notice period can be extended by 8 months for employees with less than 20 employees
  • 15-20 years: 3 months’ severance pay or the notice period can be extended by 9 months for employers with less than 20 employees
  • 20-25 years: 6 months’ severance pay or the notice period can be extended by 12 months for employers with less than 20 employees
  • 25-30 years: 9 months’ severance pay or the notice period can be extended by 15 months
  • 30+ years: 12 months’ severance pay or the notice period can be extended by 18 months.

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