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Remote’s guide to employing in

Luxembourg
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Make employment in Luxembourg easy. Let us handle payroll, benefits, taxes, compliance, and even stock options for your team in Luxembourg, all in one easy-to-use platform.

  • Capital City

    Luxembourg City

  • Currency

    Euro (€, EUR)

  • Languages

    Luxembourgish, German, and French

  • Population size

    626,108

Services available in this country:
Employer of Record ProductContractor Management

Facts & Stats

Luxembourg Map Illustration
  • Capital City

    Luxembourg City

  • Currency

    Euro (€, EUR)

  • Languages

    Luxembourgish, German, and French

  • Population size

    626,108

  • Ease of doing business

    Easy

  • Cost of living index

    88.28 (2021)

  • Payroll frequency

    Monthly

  • VAT - standard rate

    17%

  • GDP - real growth rate

    2.3 (2019)

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.

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.

Risks of misclassification

Luxembourg, like many other countries, treats self-employed individuals or contractors and full-time employees differently. Misclassification of contractors in Luxembourg may lead to fines and penalties for the offending company.

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.

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.

10 Public holidays

Jan
Monday, January 1, 20241New Year's Day (Neujahr)
Apr
Monday, April 1, 20242Easter Monday (Ostermontag)
May
Wednesday, May 1, 20243Labor Day (Tag der Arbeit)
Thursday, May 9, 20244Feast of the Ascension of Jesus Christ (Europatag)
Monday, May 20, 20245Pentecost Monday (Pfingstmontag)
Jun
Sunday, June 23, 20246National Day (Nationalfeiertag)
Aug
Thursday, August 15, 20247Assumption of Mary (Mariä Himmelfahrt)
Nov
Friday, November 1, 20248All Saints' Day (Allerheiligen)
Dec
Wednesday, December 25, 20249Christmas Day (Weihnachtstag)
Thursday, December 26, 202410Saint Stephen's Day (Stephanstag)

Want to see and manage all holidays? Sign up for our free HRIS!

Effortless HR in Luxembourg: Take the Tour

Seamlessly Manage Your Workforce, from First Hire to Final Paycheck

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

Taxes in Luxembourg

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

  • 12.04 - 14.99%

    Social security contribution

Types of leave

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

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.

Fair Pricing in Luxembourg

Employer of Record

Hire and pay your global team

Starting at $599/month

Top features

  • Satisfaction guaranteed

  • No deposits or hidden fees

  • Zero onboarding or offboarding fees

  • Compliant equity incentives support including withholding and reporting

  • Built-in security and compliance

  • Fast onboarding (average 2-3 days)

  • Flexible, localized benefits

Contractor Management

Compliantly onboard and pay contractors

$29

per contractor/month

Start free trial

Top features

  • Only pay for contractors you actively work with

  • Work with contractors in 200+ countries

  • Create, edit, and sign tailored, localized contracts

  • Approve contractor invoices with one click or auto-pay

  • Transparent payments with complete visibility

Global Payroll

Consolidate your multi-country payroll

$50

per employee/month

Top features

  • Reduce costs by centralizing payroll management

  • Ensure local compliance for every country

  • Direct support from in-house local payroll experts

  • Accurate, on-time, compliant payroll to level-up your employee experience

  • Tax and labor authority reporting handled for you

HRIS

Manage all of your employees in one place

Free
Sign up

Top features

  • Guided onboarding and offboarding

  • Employee profile and document management

  • Time and attendance (time off and tracking)

  • Expense management and reimbursement

  • Employee self-serve on the platform and mobile app