* Playroll continues to analyse immediate opportunities and fulfilled roles by recruitment partners, contractors and employers to identify in-demand jobs.

Capital City

Euro (€)



Employment Cost

12.22% - 15.30%

Annual Leave

26 days

In-demand Specialties*
Technology And It, Healthcare And Medicine, Engineering

The Ultimate Guide to Hiring Employees in Luxembourg

Simplify hiring employees in by partnering with Playroll. Our Employer of Record (EOR) handles hiring, onboarding, payroll, taxes, immigration, benefits administration, and compliance. While you maintain control of day-to-day tasks and responsibilities.


Key Considerations Before Hiring In Luxembourg

Employing in Luxembourg requires employers to own a legal entity in the country and manage payroll, tax, benefits and compliance through their own in-country resources. Grow your team in Luxembourg with our Employer of Record solution, ensuring streamlined, compliant business expansion with no entity.

Playroll allows you to hire employee's in Luxembourg quickly, easily and we even automate tax document collection, benefits, payroll and more.

Good To Know

In Luxembourg, salaries are influenced by the consumer price index. If the index changes by 2.5% in the previous semester, salaries are typically adjusted by the same percentage.

Luxembourg offers high wages thanks to its skilled, multilingual workforce fluent in French, German, and Luxembourgish.

Luxembourg, known for its wealth and stable economy, holds the top spot for the world's highest GDP per capita rate.

The financial sector dominates Luxembourg's economy, contributing 36% to the total GDP, followed by the industry at 13.3%.


Fundamental Aspects of Employment in Luxembourg

In Luxembourg, employment contracts are typically indefinite, but for fixed-term contracts, strict regulations apply under the Labor Code. Both types necessitate written form and mutual understanding, with no language requirements. Contracts should encompass essential employment details, including:

  • Identification of both parties
  • Commencement date
  • Workplace(s)
  • Job description, duties and responsibilities
  • The employee's salary as well as other compensation or benefits, and terms of payment
  • Working hours and schedule
  • Notice periods for employment termination
  • Probation period
  • Reference to additional clauses as agreed by the two parties

Probationary Period in Luxembourg

Employment contracts in Luxembourg must outline probation periods, lasting 2 weeks to 6 months, with varying limits based on skills and salary. Unskilled workers have a maximum trial period of 3 months, while those earning over 5 times the minimum wage can trial for up to 12 months.

Working hours in Luxembourg

The regular working hours are 40 hours per week in Luxembourg, employees can work 8 hours a day.

Overtime in Luxembourg

Overtime in accordance with employment agreements is capped at 2 hours per day and 8 hours per week, compensated at 150% of the regular salary. Sunday work is restricted unless otherwise specified, with specific compensation arrangements.

Navigating Key Aspects of Payroll in Luxembourg

Luxembourg has a robust and complex payroll and tax system, and as an employer, it pays to understand payroll process basics.

1 January - 31 December

Fiscal Year in Luxembourg

1 January - 31 December is the 12-month accounting period that businesses in Luxembourg use for financial and tax reporting purposes.

Payroll Cycle in Luxembourg

The payroll cycle in Luxembourg is usually Monthly, with employees being paid by the last day of the month.
18.8 EUR p/h

Minimum Wage in Luxembourg

The minimum wage for employees in Luxembourg is typically 18.8 EUR per hour, amounting to ~3,009.88 EUR per month for a typical 40 hour work week.

Minimum wages and salaries in Luxembourg

The minimum wage in Luxembourg is 18.8 EUR an hour.

Bonus Payments in Luxembourg

In Luxembourg, it's common to receive a 13th salary. This payment is equal to one month's salary usually given at the end of the year. Employers often provide an additional half month's salary as well.

Comprehensive Overview of Employment Taxes in Luxembourg

Understanding the tax obligations for both employers and employees is crucial when operating in Luxembourg's business landscape. This section explains how taxes and statutory fees affect payroll and individual earnings in Luxembourg.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 12.22% - 15.30% on top of the employee salary in Luxembourg.

Tax Rate Tax Type

Employee Payroll Tax Contributions

In Luxembourg, the typical estimation for employee payroll contributions cost is around 12.20% to 12.45%.

Tax Rate Tax Type

Individual Payroll Tax Contributions

Luxembourg's income tax system is intricate. Individual income tax rates range from 8% to 42%, calculated based on progressive rates, marital status, and the number of children an employee has.

Tax Rate Income Bracket

Pension in Luxembourg

Employers, employees, and the State contribute 8% each to the general pension insurance scheme. The fund covers old-age pensions, disability pensions, and survivors' pensions. The retirement age is 65.

The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Luxembourg tailored to your needs.

Easily navigate payroll, taxes and contributions with Playroll.

Grow your distributed workforce today!

Understanding the Protocols for Termination of Employment in Luxembourg

When it comes to terminating employment in Luxembourg, understanding the legal obligations regarding severance pay and contributions is essential. Below is a detailed overview of the key considerations for both employers and employees.

Termination Process

Termination procedures vary based on employment and collective agreements, contract type, and reasons for termination. Employers with over 150 employees must conduct a hearing before dismissal, and those with at least 15 employees must inform the economic committee about dismissals. Valid reasons for termination include:

  • Employee’s aptitude or conduct
  • Redundancy
  • Closure of business

Notice Period

If a collective agreement specifies notice periods that differ from statutory ones, both employer and employee must follow the collective agreement's notice periods. The notice duration depends on the length of service.

  • Two months’ notice for employees with less than five years of service
  • four months’ notice for employees five to ten years of service.
  • Six months’ notice for employees with more than ten years of service.

Severance Pay

In Luxembourg, employees terminated without proper notice or with over 5 years of service are entitled to severance pay. It equals 30 days of salary per year, capped at 25 months of base compensation.

  • No severance pay for employees with less than 5 years of service.
  • 1 month’s salary for employees with less than 10 years of service
  • 2 months’ salary for employees with Less than 15 years of service
  • 3 months’ salary for employees with less than 20 years of service
  • 6 months’ salary for employees with Less than 25 years of service
  • 9 months’ salary for employees with Less than 30 years of service
  • 12 months’ salary for employees with more than 30 years of service.

Annual Leave Entitlements and Company Policies in Luxembourg

The annual leave entitlement in Luxembourg is 26 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays in Luxembourg

Luxembourg has 11 mandatory national holidays in a year.

Holiday Date

Paid Time Off in Luxembourg

Maternity Leave in Luxembourg

Paternity Leave in Luxembourg

Sick Leave in Luxembourg

Parental Leave In Luxembourg

Luxembourg's Benefits Built Into Playroll

Competitive benefits package in Luxembourg

Playroll is committed to providing tailored, competitive benefits packages that are designed not only to attract but also retain top talent worldwide. Our global team of benefits experts build custom local packages to ensure your employees in Luxembourg's needs are met. Typically our packages contain some or all of the following benefits.

Health Insurance
Pension or 401k
Life and Disability Insurance
Vision Insurance
Dental Insurance
Discounts & Perks

Playroll Supplementary Benefits For Employment In Luxembourg

Make your benefits package in Luxembourg a talent magnet with Playroll's local plans. We offer benefits that are compliant, comprehensive, and flexible — all at competitive rates. Speak with our local territory experts to explore the localized benefits we can offer you, while you scale your team.

  • Health Insurance
  • Pension
  • Workman's Compensation
  • Background Checks
  • IT Equipment Sourcing

Statutory benefits for employment in Luxembourg

Playroll allows you to provide localized benefits for employees in Luxembourg within minutes. All in one manageable online dashboard. If you'd like specific information about our benefits packages in Luxembourg create an account or contact our global expansion team, today.

Playroll Benefit Services

Playroll's Expertise in Facilitating Work Visas for Luxembourg

At Playroll we're all about empowering employees to work anywhere, making mobility possible for global teams. We sponsor visas and hire the employee for you, so you don’t have to worry about payroll, taxes, and more.

It's important to note, visa support can be complicated. There are many variables that affect whether sponsorship is possible, including one’s nationality, education, marital status, and the immigration policy for the country in question.

Unfortunately, this means we can’t support visas everywhere - with that being said, we handle the entire visa process in-house, and dig into your situation to give you an overview of what to expect if we're able to help with visa sponsorship in Luxembourg.

Playroll Immigration Support

Integrated EOR Platform

Legal and compliance experts are readily available to provide guidance and case-by-case Q&A support.

Accelerated Immigration Timeline

By leveraging dedicated support from in-house legal and compliance experts for case by case questions and more.

Hire in 50+ Countries

Accelerated Immigration Timeline

Acquiring a visa without an entity has never been easier, leverage Playroll's global coverage to sponsor and hire employees.

Playroll Visa Services

Hiring International Employees is Complex.

Playroll makes it easy!