Hire and pay employees in
Luxembourg, hassle-free

With Deel, your business can easily hire employees in Luxembourg. No more worrying about local laws, complex tax systems, or managing international payroll. Deel takes care of everything in 150+ countries.

The average onboarding time frame in Luxembourg is 14 days with Deel.

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Currency

Euro

Capital

Luxembourg

Official Language

French, German & Luxembourgish

Payroll Cycle

Monthly

Onboard, pay and manage employees in Luxembourg with Deel.

Usually, to hire in Luxembourg, your business needs an entity. That means a local office, an address registered as a subsidiary, and an account with a local bank. All of this, plus navigating regional benefits, payroll, tax, and HR laws, can take months.

Deel lets you hire employees in Luxembourg quickly, easily, and compliantly. We even automate tax document collection, payroll, benefits, and more. For your existing direct employees, we can manage your entire payroll operation from end-to-end.

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All the necessary benefits for Luxembourg
built right in

Deel allows you to provide localized benefits for employees in Luxembourg within minutes. All in one manageable online dashboard.

  • Pension Fund
  • Private Healthcare - Unisure (optional)
  • Private Healthcare - Allianz (optional)
  • Global Life Insurance - Allianz

Our quickstart guide to hiring in Luxembourg

Navigate the tabs below to learn everything you need to know about hiring an employee in Luxembourg

Pay & Tax Leave Policy Termination Statutory time off Onboarding Additional info

Minimum Wage Requirements

The the minimum wage can vary according to the employee's skills. For unskilled workers the minimum wage is usually around EUR 2,570.93 and around EUR 3,085.12 for skilled workers.

Individual Income Tax

Income Tax in Luxembourg is complex. The individual income tax ranges from 8% to 42%. Income tax is calculated according to progressive rates, marital state, and the employee’s number of children.

Payroll Cost

The employer cost is generally estimated at 11.94% of the employee's salary.

  • Public Pension Fund - 8%
  • Sickness and Maternity Benefits Funds (Caisse de maladie soins) - 0.25%
  • Work Accident Insurance - 0.75%
  • Public Health Insurance (Caisse de maladie soins) - 2.8%
  • Onboarding Medical Check and Employee Professional Fitness Care - 0.14%
  • Telephone and Internet Allowance - EUR 15

These costs are provided as estimates and are intended solely for general informational purposes. To fully comprehend all associated costs and fees related to the terms of any employment agreement for this country, please contact our Sales team for a quote.

Overtime Pay & Maximum Hours

Overtime payment is mandatory for all employees except for Senior Managers. Hours of overtime are paid at 140% of the regular hourly rate. Overtime may be paid as leave-in-lieu of pay (1 hour overtime of overtime equals 1 hour and 30 minutes of time off). 
For additional hours, employees are paid: 

Overtime type Pay
Standard overtime 140% of the regular hourly rate
Working on public holidays 200% of the regular hourly rate
Working on Sundays  170% of the regular hourly rate
Working at night (from 10 PM to 6 AM) 115% of the regular hourly rate

 

Maternity Leave

Employees are entitled to 20 weeks of paid leave broken into two parts, antenatal and postnatal. 8 weeks antenatal leave must be taken before the expected date of delivery

The employee will receive 100% of their highest salary during the last 3 months before their leave, and Social Security will be responsible for this pay.

Paternity Leave

Employees are entitled to 10 days of paid paternity leave. The leave must be used within 2 months of birth. The employee will receive 100% of the salary during this period. The employer will pay the first 2 days then Social Security will be responsible for paying the remaining 8 days.

Parental Leave

Employees are entitled to one of two parental leave options following completion of maternity and/or adoption leave. Parental leave can last up to 6 months depending on the number of hours shown in the parent's employment contract and their employment status. Both parents can decide how to distribute the time off. Either parent can take parental leave. Social security will calculate the employee's pay based on their average salary from the previous 12 months.

Sick Leave

Employees are entitled to an unlimited number of paid sick days. The employee will receive 100% of their salary from the employer for the first 77 days. If the 77th day falls after the 1st day of the month, for example, March 18, the employer is required to continue paying the employee for the remaining days of that month, if the employee stays on sick leave. From the 1st day of the month following the 77th day of sickness, sick leave is paid at 100% of the employee’s regular salary, up to a ceiling of the minimum social salary x5, directly by Social Security.

Termination Requirements

Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.

There is no at-will termination in Luxembourg for employers and termination must be done for just cause.

Compliant terminations include:

  • Voluntarily by the employee
  • By mutual agreement
  • Unilaterally by the employer based on:
    • probation period
    • objective grounds
    • disciplinary dismissal
    • performance due to unsuitability for the job
  • By expiration of the contract

Notice Period

The minimum notice period is 30 days and will be increased according to the length of the employment and the type of termination.

Notice upon termination by the Employer:

  • 60 days if the length of service is less than 5 years
  • 120 days if the length of service is more than 5 years but less than 10 years
  • 180 days if the length of service is more than 10 years

Notice upon resignation by the Employee:

  • 30 days if the length of service is less than 5 years
  • 60 days if the length of service is more than 5 years but less than 10 years
  • 90 days if the length of service is more than 10 years

Severance for Employees

In Luxembourg, all employees who are terminated without appropriate termination notice or have been employed with the company longer than 5 years are entitled to severance pay. Severance pay is 30 days of salary per year of service up to 25 months base compensation.

  • From years 5-10 of seniority, 4 months of salary.
  • From years 10- 15 of seniority, 2 months of salary.
  • From years 15-20 of seniority, 3 months of salary.
  • From years 20-25 of seniority, 6 months of salary.
  • From years 25-30 of seniority, 9 months of salary.
  • From years 30+ of seniority, 12 months of salary.

Paid Time Off

Both full-time employees are entitled to 26 working days of paid time off (PTO) a year. PTO accrues monthly at 2.17 days per month. Employees are eligible for annual leave after 3 continuous months of work. Part-time employees are entitled to a prorated portion of vacation days. 

Public Holidays

Luxembourg celebrates 11 national holidays

  • National public holidays include:
  • New Year's Day
  • Easter Monday
  • Labour Day
  • Europe Day
  • Ascension Day
  • Whit Monday
  • National Day
  • Assumption Day
  • All Saints' Day
  • Christmas Day
  • 2nd Day of Christmas

Onboarding

Due to lengthy compliance steps, the onboarding timeline can vary from 2 weeks to 1 month. Documents must be completed 1 day before the start date.

In Luxembourg, new hires must be reported to the national employment agency, ADEM (Agence pour le développement de l'emploi). During the onboarding process, you will receive an additional form to complete, which Deel will use to notify the ADEM. Once the ADEM has confirmed the registration, Deel will be able to send the employment agreement to your employee

Employment Contract Details

Contracts can be in English. They must be in writing and signed by both parties.

A contract must include:

  • name
  • start date
  • length of the employment
  • job description
  • termination conditions
  • monthly salary
  • address of work 
  • working hours
  • holidays
  • bonuses
  • benefits

Probation Period

The minimum probation period is 180 days. The maximum probation period is 180 days for employees and 365 days for executives
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Hiring in Luxembourg, hassle-free

With Deel, your business can easily hire employees in Luxembourg with our EOR solution. If you have an entity, our Global Payroll solution takes care of payroll and compliance for your direct employees. Our 250+ in-house experts handle everything from managing local laws, complex tax systems, or your payroll in Luxembourg and 150+ countries.

Group (8)

Starting at 599 USD

Management fee

Group (9)

12%

Estimate Employer Cost

*of employee salary

Want to learn the cost of hiring an employee in Luxembourg?

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