Salary levels, minimum social benefits

Wages Luxembourg

Arriving in Luxembourg and looking for work? When you're looking for work in a country other than your home country, it's important to have some simple, practical benchmarks in mind about the levels of remuneration on offer.

Here you will find useful information about salaries in Luxembourg.

  • calculation of net salary from the gross salary announced by your employer,
  • legal social minimum wage
  • gender pay gap
  • average salaries by business sector.

Remuneration levels in Luxembourg

Wages are freely agreed between employer and employee. It represents the consideration for the work performed. This negotiation takes place during the recruitment process , between the job-seeker and the recruitment officer. Negotiations can also take place during the term of the contract.

Difference between gross and net salaries in Luxembourg

In salary negotiations, we always talk about gross salary. This is the theoretical salary, i.e. before deduction of various social security contributions and, above all, before calculation of tax. Tax is deducted at source by the employer.

The gross salary does not take into account any benefits in kind that may be negotiated in addition.

A number of charges must be deducted from the negotiated gross salary to obtain the net salary actually paid to the employee. 

Social security contributions deducted from gross salary in Luxembourg

Social contributions represent the social security contributions paid to the CCSS by both the employee and the employer.

Social security contributions cover health insurance, old-age pension insurance and unemployment insurance. These deductions vary according to the instructions issued annually by the Ministry of Finance.

Social security contributions amount to around 12.5% of gross salary, payable by the employee. The company also contributes the same amount for old-age, unemployment and accident insurance.

Income tax withheld in Luxembourg

In Luxembourg, tax is deducted at source by your employer. 

The employer calculates the taxes due by the employee on the basis of the tax card sent annually by the Administration following the taxpayer's declarations. The deducts this amount from the gross salary and pays a net salary to the employee.

In short, the salary received by the employee is net of social security contributions and taxes. 

Find out more about income tax in Luxembourg.

Calculating take-home pay in Luxembourg

Find out more about taxation in Luxembourg.

Luxembourg social minimum wage (SSM)

In Luxembourg, employers must pay their employees a minimum social wage (SSM), depending on their qualifications and age.

This social minimum wage is determined for both unskilled and skilled workers. It also varies over time according to an index calculated on the basis of inflation. The triggering of the index affects all wages, which must be raised by 2.5% each time.

For the 3rd time in 2023, the index has triggered a further rise in salaries, representing an overall increase of 7.7%.

With effect from September 1, 2023, following a further increase in the index band, the monthly social wage now stands at : 2,570.94 euros minimum for an unskilled worker over 18 years of age and working full-time for 40 hours a week .

Luxembourg wage scale

Minimum hourly wage in eurosMinimum monthly salary in euros
Qualified employee over 18 years of age17,83303.085,11
Employee over 18, unskilled14,86082.570,93
Employee 17 to 18 years old11,88862.056,74
Employee 15 to 17 years11,14561.928,19

Qualification must be justified by official certification, or by a minimum number of years' professional experience. These rules may be governed by the collective bargaining agreements of the sector in which you work.

Indexing salaries to the cost of living in Luxembourg

Social minimums are adjusted by the authorities on the basis of average earnings. In the event of an increase in these minimum levels, employers must increase the salaries of the employees concerned accordingly.

Wages are also indexed to the cost of living. When the price index rises by +2.5% over the previous 6 months, all salaries must be increased by the same amount.

Employers are obliged to increase the remuneration of all their employees accordingly. Failure to do so may result in a fine.

Remuneration of pupils and students during school vacations

Pupils and students in seasonal employment may not be paid less than 80% of the social minimum wage. See above.

Average salaries by sector in Luxembourg

According to the latest OECD statistics for 2021, the average salary paid in Luxembourg is USD 75,305. This puts Luxembourg in first place, ahead of the USA with 74,738 USD and Iceland in third place with 72,434 USD. Switzerland is in fourth place with 69,726 USD.

Average salaries in Luxembourg are high compared to the European average. They are also much higher than in neighboring countries. This clearly explains the number of cross-border workers from France, Germany and Belgium, attracted by the much more attractive salaries.

On average, a full-time employee in Luxembourg earned 64,932 euros (source STATEC 06/2021). This figure represents 182% of the European average. However, this figure needs to be tempered by the atypical nature of the Luxembourg labor market.

  • Financial and insurance activities: 99,250 euros per year
  • Teaching: 98,835 euros. Luxembourg teachers are the best paid in Europe.
  • Specialized, scientific and technical activities: 88,721 euros
  • Public administration: 104,256 euros. A report by the French Ministry of the Civil Service, published in November 2022, showed that civil servants earned an average of 8,688 euros per month. More than a hundred various allowances are added to this annual remuneration, which can reach up to an additional 9,384 euros per year. Over 60% of state employees receive at least one of these additional allowances.

Source: Administration des contributions directes.

To find out more, take a look at our study of remuneration and recruitment trends by business sector.

Pay differentials in Luxembourg

In Luxembourg, women earn more per hour than men! Since 2021, and for the first time, women have earned more per hour than men.

Gap gender apparently favorable to Luxembourg

Since 2018, the gender pay gap in Luxembourg has been the smallest in Europe. The balance even tips in favor of women when hourly wages alone are taken into account, with a gap of -0.2%. 

In the latest study published by Eurostat, Luxembourg is ahead of Romania and Slovenia. These two countries have respectively a 3.6% and 3.8% gap between men's and women's average hourly earnings.

Expressed as a % of that of men, this gender pay gap is particularly remarkable in Luxembourg. The efforts made by the Luxembourg government in this area show that significant progress has been made since 2006. At that time, women's pay lagged behind that of men by 10%.

The reality of gender inequality in Luxembourg

At first glance, these figures are encouraging. Nevertheless, the real pay gap remains at 7%, when total annual remuneration is taken into account. This is because women hold more part-time jobs. In addition, although they have a higher level of education than men, they are less represented in high-paying positions. Less than 1% of women earn more than 200,000 euros. While 2% of men earn more than 200,000 euros a year.

Gender equality policy in Luxembourg

For over 20 years, the Luxembourg government has been committed to promoting gender equality. At all levels of society.

A Ministry for the Advancement of Women was created in 1995, and has since been replaced by the Ministry for Equality between Women and Men (MEGA).
Laws have been enacted to respect this equality.

A gender equality portal has also been set up. It deals with equality in various areas, including work, society and youth.

The CNFL platform, Conseil National des Femmes au Luxembourg, lists the various competent contacts in the field of equality between women and men within institutions and with partners.

To complete this information, see also our pages on the job market.

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