Luxembourg

Employer of Record (EOR) in Luxembourg

Only 399 EUR per employee per month

Rivermate's Employer of Record (EOR) solution helps companies hire remote employees in Luxembourg . We take care of global payroll, taxes, benefits, compliance and HR activities. So you can focus on growing your business. Our Employer of Record (EOR) solution is beneficial to companies that want to hire remote employees in a breeze. On this page you will find employment information for Luxembourg.

Employer of Record people
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Currency
Euro
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Capital
Luxembourg
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Region
Europe
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Language
French
Hire remote employees
Population
625978
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GDP
$62.32 billion
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GDP growth
0.023
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Ease of doing business
69.6
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World GDP share
0.0008

1. Grow your team in Luxembourg with Rivermate as your Employer of Record (EOR) / PEO

Payroll, benefits, taxes, and compliance can be difficult to manage in Luxembourg , particularly if you don't have established local relationships. You can hire employees in Luxembourg effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global Employer of Record (EOR) solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

2. Summary

Luxembourg is a nation in Western Europe that is landlocked. It is bounded to the west and north by Belgium, to the east by Germany, and to the south by France. Luxembourg City, its capital and biggest city, is one of the four official capitals of the European Union (together with Brussels, Frankfurt, and Strasbourg) and the headquarters of various EU organizations, including the Court of Justice of the European Union, the highest judicial authority. While Luxembourgish is constitutionally the sole national language of the Luxembourgish people, French and German are also used in administrative and judicial issues, and all three are recognized administrative languages of the country.

Luxembourg is one of Europe's smallest sovereign republics, with an area of 2,586 square kilometers (998 square miles). It had a population of 645,397 in 2022, making it one of Europe's least populated nations, yet having the fastest population growth rate; immigrants make up about half of the population. Luxembourg is a constitutional monarchy led by Grand Duke Henri, making it the world's only surviving sovereign grand duchy. It is a developed nation with a developed economy and one of the highest GDP (PPP) per capita in the world. Due to the outstanding preservation of the massive fortifications and medieval neighborhoods, the City of Luxembourg was designated a UNESCO World Heritage Site in 1994.

Luxembourg's history is said to begin in 963, when count Siegfried purchased a rocky promontory and its Roman-era defenses, known as Lucilinburhuc, "small castle," and the surrounding land from the Imperial Abbey of St. Maximin in neighboring Trier. Through marriage, conquest, and vassalage, Siegfried's successors expanded their domain. The counts of Luxembourg ruled over a large region towards the end of the 13th century. In 1308, Count of Luxembourg Henry VII was crowned King of the Romans and subsequently Holy Roman Emperor; throughout the High Middle Ages, the House of Luxembourg produced four Holy Roman Emperors. Charles IV raised the county to the Duchy of Luxembourg in 1354. The duchy subsequently became a member of the Burgundian Circle and then one of the Habsburg Netherlands' Seventeen Provinces. The City and Fortress of Luxembourg, which was strategically important owing to its position between the Kingdom of France and the Habsburg possessions, was progressively built up over the ages to become one of Europe's most renowned fortresses. After being a member of both Louis XIV's France and Maria Theresa's Austria, Luxembourg became a component of Napoleon's First French Republic and Empire.

The current state of Luxembourg was established during the Congress of Vienna in 1815. With a Prussian force to secure the city from another French invasion, the Grand Duchy became an independent state under the personal control of William I of the Netherlands. Following the turbulence of the Belgian Revolution in 1839, the solely French-speaking half of Luxembourg was transferred to Belgium, and the Luxembourgish-speaking part (save for the Arelerland, the territory surrounding Arlon) became what is now Luxembourg.

Luxembourg is a founding member of the European Union, the Organization for Economic Cooperation and Development, the United Nations, NATO, and Benelux. It initially sat on the United Nations Security Council in 2013 and 2014. Luxembourg nationals enjoyed visa-free or visa-on-arrival access to 189 countries and territories as of 2022, placing the Luxembourgish passport third in the world, with Finland, Italy, and Spain.

Hiring talented employees in a short span is not an easy task. Partnering with an Employer of Record (EOR) like Rivermate in Luxembourg is your best option, giving your organization enough time to focus on other aspects of international expansions like project management and inventory management. The EOR takes care of all the compliance and legal issues while helping you speed up hiring using their knowledge of domestic employment practices and virtual onboarding tools. Top EORs also have provisions for the e-signing of documents to enable faster onboarding.

3. Public holidays

4. Types of leave

There is no information about the types of leave for this country.

Paid time off

Employees are entitled to 26 days of paid vacation each year. In addition, those workers are entitled to extra time off:

Persons who are disabled who have been injured at work are entitled to an additional six days of leave.

Employees in the mining industry are entitled to an additional three days of vacation.

An employee or apprentice who has not had a consistent rest time of 44 hours per week, plus one extra day for every 8 weeks the employee has not had continuous rest.

Public holidays

Luxembour recognizes eleven public holidays.

Sick days

The maximum amount of accrued vacation time is 26 weeks. There is no requirement to have a medical certificate if an employee is hospitalized for one or two days. A credential is issued if an employee is absent for more than three days.

Maternity leave

Maternity leave in Luxembourg is 20 weeks long and will start as early as eight weeks before the due date. To be considered, the woman must have had mandatory health care for at least 6 months in the 12 months prior to maternity leave. Furthermore, the woman must inform her boss at least 12 weeks prior to the scheduled due date.


Maternity leave is covered by social security, which cannot be less than the minimum wage and is set at 5 times the minimum wage.

Paternity leave

Paternity leave lasts for ten days. If the father fails to contact their boss at least two months in advance of the planned leave, the leave will be limited to two days. Furthermore, this leave does not have to be taken in a specific order and can be taken within two months of the child's birth.

Parental leave

There are two kinds of parental leave, each of which can be used only once per child:


Following maternity or adoption leave – this leave must be taken as soon as possible after an infant is born or adopted; otherwise, it will be forfeited.

Before the infant hits the age of six or twelve whether he or she is adopted.


All leaves are dependent on the number of hours of the employee's contract and can be taken in full, partly, or shared with the other parent:


40 hours a week - 4–6 months of full-time leave; 8–12 months of part-time leave (50 percent of daily working hours); 4 cycles of one month leave in a 20–month span; 1-2 half days of leave per week in a 20–month period

4-6 months of full-time leave; 8-12 months of part-time leave; at least 20 hours a week (50 percent of regular working hours)

4-6 months of full-time leave for at least 10 hours a week


The boss has the authority to grant split or partial leave.


To be eligible:

At the time of the child's birth or adoption, the parent may have been enrolled with social security for at least 12 months.

Employees on a salary would have served a minimum of 10 hours per week.

Get a job lined up when you're on vacation.


The Children's Future Fund provides an income in lieu of wages.

Other leave

5. Employment termination

There is no information about employment information for this country.

Termination process

Termination must be in writing in Luxembourg, however neither party is compelled to give a reason unless the cause is instant dismissal. This information, however, must be disclosed upon request.

Employers with more than 150 employees are required to have a hearing before dismissing an employee. Employers must notify the Economic Committee of the discharge of employees with at least 15 employees.

Notice period

The notice period is determined by the duration of the employment. There will be a two-month notice period for employees with less than five years of service. There will be a four-month notice period for employees who have worked for the company for five to ten years. There will be a six-month notice period for employees with more than ten years of service. If the dismissal letter is provided prior to the 15th of the month, the notice period begins on that date. If, on the other hand, the dismissal letter was delivered between the 15th and the last day of the month, the notice period begins on the first day of the following month. Additionally, payment in lieu of notice is an option.

Probation period

Probation periods are generally two weeks in length and are determined by the employee's salary and qualifications. If an employee earns at least 4,474.31 EUR per month, the maximum probation period is 12 months. The maximum probation period is six months if the employee holds a vocational skills certificate or an equivalent. If the employee lacks a vocational skills certificate or an equivalent, the probation period is limited to three months.

Severance pay

Severance pay is calculated based on the duration of employment. Severance pay will not be provided if the employee has worked for the company for less than five years. Severance pay equals four months' salary for five to ten years of employment, or the notice period can be extended by five months for employers with fewer than twenty employees. Severance pay equals two months' salary for ten to fifteen years of employment, or the notice period can be extended by eight months for employers with fewer than twenty employees. Severance pay is equivalent to three months' salary for employees who have worked for an employer for fifteen to twenty years, and the notice period can be extended by nine months for employers with fewer than twenty employees. Severance pay equals six months' salary for a tenure of twenty to twenty-five years, or the notice period can be extended by twelve months for employers with fewer than twenty employees. Severance pay equals nine months' salary for a tenure of twenty-five to thirty years, or the notice period can be extended by fifteen months for employers with fewer than twenty employees. Severance pay is equivalent to twelve months' salary for employees who have worked for an employer for more than thirty years, and the notice period can be extended by eighteen months for employers with fewer than twenty employees.

6. Working hours

There is no information about the working hours for this country.

General working schedule

The standard workweek consists of eight hours per day, five days a week. The workweek is limited to 48 hours, and employees are not permitted to work more than 10 hours in a single day. Sunday is a prohibited day of work, with the exception of certain jobs and tasks that cannot be performed at other times.

These restrictions do not apply to certain categories of employees, most notably executives and senior management personnel who play a critical role in ensuring the business's proper operation.

Night shift employees (10 p.m. to 6 a.m.) are entitled to a premium.

Overtime

For each hour worked beyond 40 hours per week, employees must be compensated at a rate of at least 140 percent of the standard rate.

Employees who work on Sundays must either be paid at 170 percent of their standard rate or receive compensatory time off (half a day off if the employee worked up to four hours on Sunday, a full day off if the employee worked more than four hours) and be paid 70 percent of their standard rate for the Sunday hours in addition to the compensatory time off.

Employees who work on federal holidays are entitled to pay (sometimes with a premium) and compensatory time off based on one of several formulas.

Overtime or Sunday pay is tax-exempt and does not require social security contributions.

7. Minimum wage

There is no information about the minimum wage for this country.

The minimum wage is 2,201.93 EUR per month. The minimum wage for a skilled worker has been increased by 20%, bringing it to 2,642.32 EUR.

8. Employee benefits

There is no information about the employee benefits for this country.

Luxembourg has one of the finest healthcare systems in Europe. The nation offers a high level of state-funded healthcare, and the healthcare system provides all people with basic medical coverage. Furthermore, all citizens have the freedom to choose their own doctor, specialist, and hospital. Luxembourg's Union of Sickness Funds is in charge of the country's health-care system.

Everyone working in Luxembourg must be a member of one of many insurance funds, depending on their profession. The majority of Luxembourgers get private supplementary insurance to cover expenses not covered by the public healthcare system.

Through healthcare taxes, all employed citizens and workers pay to this system. The maximum amount is 6,625 EUR. Employees and employers each pay half.

Many Luxembourgers get supplemental insurance via one of the Ministry of Social Security's non-profit health insurance organizations or mutual societies (mutuelles). Many companies provide supplemental insurance as a perk of the job. A mutuelle covers the part of your medical expenses not covered by national health insurance and may provide expanded coverage for hospitalization, eye care, dental treatment, and medical services outside of Luxembourg.

9. Taxes

There is no information about the taxes for this country.

Corporate tax

Companies in Luxembourg are imposed a corporate tax rate of 28.69 percent. This rate is composed of a 17 percent income tax, a 1.19 percent unemployment fund contribution, and a 6 to 10.5 percent municipal trade tax.

Individual income tax

Taxable persons in Luxembourg are subject to a personal income tax rate between 8 percent and 45.78 percent. The actual percentage varies depending on the income bracket the taxable person belongs to.

VAT, GST and sales tax

The value-added tax (VAT) or goods and sales tax (GST) rate in Luxembourg has a standard rate of 17 percent. Some goods and services receive a reduced rate of 3 percent.

10. VISA and work permits

There is no information about VISA and work permits for this country.

Citizens of the EU, EEA, and Switzerland do not need a work visa to work in Luxembourg. For their first year in Luxembourg, Europeans with Croatian citizenship must still get a separate work permit.

Anyone intending to remain in the nation for more than 90 days must go to the local Municipal Office in Luxembourg during the first week of arrival to announce their arrival and intention to stay. A certificate for address registration is also required.

Any foreigner who wishes to remain in Luxembourg for more than 90 days for employment reasons must get a work visa.

All Luxembourg employers are required to have passed the labor market exam. The declaration of the empty post must be made to the National Employment Agency three days before it is published in any public advertising (ADEM). If the post has not been filled by an EU national after two months, the business may continue with extending the employment offer to a third-party national.

The company is not obligated to go through the labor market test for highly qualified individuals. The employee must, however, report the available job with ADEM. The employee must have a written employment contract that is valid for more than one year and be able to demonstrate that they have the necessary credentials and educational background to carry out the work obligations. Furthermore, the pay must be at least 1.5 times the average gross annual income or 1.2 times the average gross annual salary for specific occupations.

Prior to coming in Luxembourg, a foreigner must have a firm job offer from a Luxembourg company in order to apply for a work visa. As the basis for approving a residence visa based on work, this offer/contract of employment must be in conformity with Luxembourgish labor legislation. This means that if the foreigner's work with that employer is terminated, the visa will become invalid.

For highly qualified personnel, the company is exempt from the labor market test, but must still report the available post with ADEM. The employee must have a written employment contract that is valid for more than one year and be able to demonstrate that they have the necessary credentials and educational background to carry out the work obligations. Furthermore, the pay must be at least 1.5 times the average gross annual income or 1.2 times the average gross annual salary for specific occupations.

11. Employer Of Record service terms

There is no information about the Employer of Record (EoR) service terms for this country.

Employment contracts

The identity of the parties

The workplace

The terms of the probationary period if there is one

The employee’s duties

Annual leave

Address of employee and of the employer’s registered office

Salary details

Benefits to the employee

The employee’s usual working hours

Renewal of contract (if applicable)

The date of commencement (and end date if applicable)

The length of the notice period to terminate the contract

If applicable, information about any supplementary pension scheme and any collective agreement that applies to the contract

With Rivermate being your Employer of Record (EoR) in Luxembourg, you do not have to worry about the employment contracts, as we take care of that.

Minimum assignment length

In Luxembourg, written employment contracts are preferable, with both the employer and the employee obtaining a signed copy. Permanent contracts are desirable, however fixed-term agreements may be viable if a unique business requirement exists. The fixed-term contract may be renewed twice, and the total duration, including renewals, is 24 months. Seasonal employment, substitute roles, and short-term occupations are some of the most frequent fixed-term jobs.

Payment currency

Euro

13.Opening a subsidiary in Luxembourg

There is no information about the working hours for this country.

How to set up a subsidiary

When Luxembourg accelerated the distribution of company licenses, it made it simpler than ever for enterprises to grow. This is fantastic news for firms who want to build a branch in the EU but need to choose a place where they can rapidly set up a subsidiary. However, since establishing a subsidiary in Luxembourg is still a lengthy and complicated procedure, you need think about a few things before diving in.

Once you've decided on Luxembourg, you'll need to carefully examine where your subsidiary will be located. Culture and languages differ by area, which may have an influence on how your company runs. Employees in Luxembourg often see business as formal and attempt to keep personal and professional lives separate.

A foreign corporation may register one of five main sorts of enterprises. A Société á Responsabilité Limitée (S.a.r.l.), which is equivalent to a private limited liability corporation, is the most common. The majority of corporations who wish to establish a Luxembourg subsidiary pick this route. However, your decision is influenced by how active you want to be in the nation.

The following actions are required to establish a Luxembourg subsidiary:

1. Deposit the bare minimum of funds.

2. Verify your business and reserve your name.

3. Request that a notary prepare and notarize your business deed.

4. Make an application for a business license.

5. Register for VAT with the Trade and Companies Register

6. Unblock the permitted capital

Subsidiary laws

The Luxembourg subsidiary rules differ depending on the kind of company you register for. A minimum paid-up capital of 12,000 EUR is required for a S.a.r.l. This capital is split into non-transferable participation certificates. You must have 2 to 100 shareholders, and each shareholder is personally responsible up to the amount of their paid-up capital.

Other rules include that your business name be unique, that you open in-country bank accounts to deposit your money, and that you legally incorporate before a Luxembourg notary public.

13. Why choose Rivermate as your Employer of Record / PEO in Luxembourg

Establishing an entity in Luxembourg to hire a team takes time, money, and effort. The labor law in Luxembourg has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into Luxembourg simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record (EOR) solutions in Luxembourg give you peace of mind so you can focus on running your business. Please contact us if you'd like to learn more about how Rivermate can help you hire employees in Luxembourg via our Employer of Record (EOR) / PEO solution.

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