company formation luxembourg

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+352 671 533 922
Company Formation Luxembourg



Payroll in Luxembourg

Updated on Thursday 30th March 2023

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Payroll in Luxembourg
Payroll services in Luxembourg can be accessed by company owners in this country. With the help of the procedures involved, salaries are calculated and distributed in the accounts of a company's employees. In Luxembourg, payroll can be made monthly or weekly, depending on the rules of the respective company. In the following lines, you can get an idea about payroll in Luxembourg, with the mention that our specialists can offer you the services you need. We also offer support for the incorporation of a company in Luxembourg.

Payroll in Luxembourg procedures

A payroll specialist in Luxembourg uses different platforms and software to calculate salaries in a company. This calculation includes the related taxes, paid by both the employee and the employer. Here are other important aspects about payroll in Luxembourg:
  • The work week in Luxembourg is 40 hours. Everything that exceeds is taken into account when paying the salary, in a percentage of 150%, if there is an agreement between the employee and the employer.
  • Once social contributions and income tax are calculated, payslips are drawn up.
  • These payslips go forward for approval by the financial department and company management.
  • Once approved, the payroll specialists in Luxembourg carry out the distribution of salaries to employees, in their accounts.
We recommend those interested in payroll services in Luxembourg contact our accountants in Luxembourg and learn more about our offers. It is much more advantageous to work with a dedicated and experienced team, instead of setting up a department in the company.

Medical and parental leave in Luxembourg

Workers in Luxembourg are entitled to 26 days of paid time off per year. In the case of people with disabilities, another 6 days are added. Here is other interesting information:
  • 26 weeks is the maximum paid sick leave in Luxembourg. This is 100% paid.
  • 20 weeks is the maternity leave in Luxembourg and can start 8 weeks before the due date.
  • There is also paternity leave in Luxembourg, up to 10 days, and the father is obliged to notify the employer 2 months in advance.

The minimum wage in Luxembourg

According to the latest data, the minimum wage in Luxembourg is around EUR 2,936 per month. This minimum wage entered into force in February 2023. As for the social minimum wage in Luxembourg, guaranteed minimum wage, and pensions, these change once every 2 years, depending on the level of cost of living and other aspects of this kind.
Let's review some of the taxes that must be paid by the employee and the employer:
  • The employing company pays taxes of around 12% of the employee's salary.
  • Income tax in Luxembourg ranges from 8% to 42%. This is calculated according to several aspects, including the marital status or the number of children of the employee.
  • Mutual health care insurance ranges from 0.72% to 2.84%.
We recommend those who own companies in Luxembourg contact us for payroll services in Luxembourg.

Employment contract in Luxembourg

Employers must draw up employment contracts for the people they want to hire in the company. Such a contract must include information about the company, the activities performed, the number of hours worked, working conditions, as well as remuneration. Also, an employment contract must stipulate whether it is part-time or full-time, plus the trial period. Normally, the trial period is 2 weeks, but employees with salaries of at least EUR 4,500 can stay on trial for 1 year.
Do you want to know more about payroll in Luxembourg? Our specialists are at your disposal with information and support, so contact us whenever you decide to start a business in Luxembourg.

Meet us in Luxembourg

Contact our specialists in company formation in Luxembourg, who have a large experience in finance and international business. 

Set up an appointment with us at +352 671 533 922. Alternatively you can incorporate your company without traveling to Luxembourg.

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As a BridgeWest partner for many years, is for sure a great choice when wanting to start a business in this important financial hub. International entrepreneurs can rely on the professionalism of this team.

Vlad Cuc, Director of BridgeWest

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