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hire in Luxembourg

Luxembourg PEO &
Employer of Record

SALARY PAYMENT IN Euro (EUR, €)

CONTRACT LANGUAGES German / English

PAYROLL TAX 12.22% – 15.30%

PAYROLL CYCLE Monthly

TIME TO HIRE 24 hours

Hire and pay talents
with Horizons in
180+ countries

Simple, compliant hiring with Horizons PEO

Hire in Luxembourg

Horizons ensures day-to-day guidance to help your business navigate Luxembourg labor laws and regulations. Horizons also ensures Luxembourg payroll is processed on time, and that taxes are withheld as required.

As the Luxembourg Employer of Record, Horizons is responsible for employee income tax withholding, payment of payroll taxes to state authorities, and submission of tax returns to the Luxembourg Tax Office. 

Partnering with our Luxembourg PEO is the quickest and most cost-effective way to enter the Luxembourg market.

Facts & Stats

PEO Platform Hire in Luxembourg, and pay employees through our platform or app. PEO Cost Our Luxembourg PEO solution is the most affordable on the market. Time-to-hire Fast onboarding in Luxembourg, hire in as little as 24 hours.
Contracts We draft labor contracts compliant with Luxembourg labor law. Local Benefits We administer all mandatory benefits and contributions in Luxembourg. 180+ Countries It doesn’t stop with Luxembourg — we are an international PEO
stay compliant with Luxembourg labor laws

Employment Laws

Employment contracts in Luxembourg

We strongly recommend producing a formal employment contract when hiring any employees in Luxembourg. English is widely spoken, but contracts should be in one of the official local languages (Luxembourgish, German, and French), and use the local currency of the Euro. Contracts should also include any relevant information about the agreement, such as salary/wage, working hours, sick leave entitlement, and so on.

By partnering with our Luxembourg PEO, Horizons’ team of local experts can provide assistance for drafting strong employment contracts that are compliant with local regulations. 

Fixed-term
Probationary period2 weeks (min.) – 6 months (max.)
Termination notice period2 months (standard)
SeveranceAfter 5+ years’ service: 4 months’ salary
Indefinite
Probationary period2 weeks (min.) – 6 months (max.)
Termination notice period2 months (standard)
SeveranceAfter 5+ years’ service: 4 months’ salary

Working hours in Luxembourg

The normal maximum working week in Luxembourg is 40 hours. Beyond this, workers must be paid at an overtime rate of at least 140% of normal pay. These limits do not apply to employees in certain roles, such as senior management.

Hire compliantly in Luxembourg without a local entity.

Quick, compliant hiring in 24 hours—no subsidiary required.

Public holidays in Luxembourg

Luxembourg has a range of national public holidays that are celebrated annually. In 2023 these holidays are:
Date Holiday name
1 Jan, 2023 New Year’s Day
10 Apr, 2023 Easter Monday
1 May, 2023 Labor Day / May Day
9 May, 2023 Europe Day
18 May, 2023 Ascension Day
29 May, 2023 Whit Monday
23 Jun, 2023 National Day
15 Aug, 2023 Assumption of Mary
1 Nov, 2023 All Saints’ Day
25 Dec, 2023 Christmas Day
26 Dec, 2023 St Stephen’s Day

Luxembourg vacation leave

Employees in Luxembourg who have been working for the same employer for at least three months are entitled to a minimum of 25 days of paid vacation leave. If they are unable to use the leave in the same year, it can be carried over until the the end of March the following year.

Luxembourg sick leave

Employees who cannot work due to sickness must provide a medical note on the third day of absence. Employees are then protected from dismissal for the following 26 weeks. Workers are also entitled to full pay and benefits for three months following the month that their sickness began. Beyond this, employees are compensated partially by the state and their employer must make up the difference to equal normal pay. This can continue for up to one year after the sickness began.

Parental leave in Luxembourg

Female employees in Luxembourg can take paid maternity leave for 16 to 20 weeks. The compensation is covered by the state up to a maximum payment of 5X minimum wage, and the rest of the employee’s salary is paid by the employer.

In some cases, both the mother and father are entitled to six months of parental leave (full-time) or one year of parental leave (part-time) until their child is five years old. This time can be compensated by the state.

Terminations and severance in Luxembourg

Employers in Luxembourg must provide notice of termination ranging from two to six months when terminating indefinite-term contracts. Employees are legally entitled to a severance payment if they have been with the employer for at least five years, and the payment can range from one to 12 months based on their level of seniority.

Employees who resign from a role must provide half of the normal notice period, and are not entitled to severance or unemployment benefits.

Different rules apply for employees in probationary periods, which can vary from two weeks up to one year in length, and employees may not be entitled to any notice of termination during this time.

Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time. Horizons’ Luxembourg PEO can mitigate risk for foreign companies and provide guidance through this process.  

Taxation in Luxembourg

Employers and employees in Luxembourg must both contribute towards social security funds, which cover things like pensions, sick pay, maternity pay, accident insurance, and so on. Employers generally need to contribute around 12.5-15.5% (with a maximum limit).

Employees in Luxembourg must pay a solidarity tax of 7% (9% for some higher earners), and are also taxed progressively at a rate that depends on income level.

Companies in Luxembourg must pay several taxes, including a solidarity tax, a municipal tax, and a corporate tax on profits. In total, the total contribution is 24.94% for most businesses (as of 2019/20).

Health coverage in Luxembourg

High-quality healthcare is funded through taxes (contributed by both employers and employees), so private insurance is not required. Some employers may choose to offer it, but it is not necessary or expected.

hassle-free Luxembourg compensation & benefits

Compensation & Benefits

Compensation laws in Luxembourg

The standard minimum wage in Luxembourg for employees over the age of 18 is 2071.07 euros per month, although skilled workers are entitled to a 20% higher minimum.

Minimum Wage Country Comparison Chart (Per month in USD)
Switzerland (Geneva) $4,000
Italy $2,255
Australia $1996
Algeria $156
Uzbekistan $22
Benefit management in Luxembourg

Many employees in Luxembourg expect benefits packages with their jobs, so you may want to set up a system when hiring in the country. However, establishing a benefits system in Luxembourg can be a difficult process, particularly if you are unfamiliar with the country’s unique laws and administrative processes.

Horizons can help to significantly simplify this phase of your Luxembourg expansion by providing benefit management outsourcing. Our team can advise you and handle the setup of your benefit scheme, enabling you to focus on expanding your organization in Luxembourg.

Hire in Luxembourg in 24h
without your own local entity.

With Horizons, you get quick service, transparent pricing, and expert support.

FAQs

A Luxembourg PEO and a Luxembourg EOR are two types of companies which specialize in providing human resources services to businesses in Luxembourg.

The main difference between a Luxembourg PEO and a Luxembourg EOR is in the scope of their services.

Luxembourg PEOs provide a full range of HR services, including payroll, benefits administration, and employee recruiting—all under one roof as a co-employer. Engaging a Luxembourg PEO is essentially outsourcing your HR duties in Luxembourg.

Luxembourg EORs actually take over as the legal employer of your employees based abroad. Luxembourg EORs become responsible for labor compliance for your employees in Luxembourg.

At Horizons, we offer both PEO and EOR services in Luxembourg. Get in touch now and let us know what service you are seeking.

A PEO in Luxembourg can feasibly hire both local and foreign nationals to work in Luxembourg.

However, the ability of Horizons to sponsor your foreign national employee in Luxembourg may be limited due to visa quotas practiced in many countries.

Contact us with your requirements and our Global Mobility team with review the case and get back to you within 2 business days.

In most cases, Horizons’ Luxembourg PEO can hire & onboard your employee within 24 hours. The actual start date of the employee will depend on their notice period obligation to their previous employer as well as any relevant hiring rules in Luxembourg.

It is possible to get a work visa in Luxembourg. Horizons’ Global Mobility team is a dedicated team of work visa experts. They assess the details of each case to determine feasibility and costs before Horizons applies for the work visa on behalf of your employee. If the Global Mobility team determines that your case is feasible, the process is smooth and transparent. Visa spots in Luxembourg are limited, however—get started today to secure your employees’ visa spot.