When you want to settle in another country, it is important to get simple and practical benchmarks quickly. Over the next few weeks we will give you an overview of the elements to take into consideration before moving to Luxembourg in terms of salaries, housing, family allowances etc..
Wage levels in Luxembourg
In Luxembourg, a minimum social wage (SSM) exists. The minimum social wage in Luxembourg is composed of two levels:
- since January 1st, 2017, the unqualified social minimum wage for a full time job (40 hours/month), which amounts to € 1.998*gross. This amount will become € 1.756 after social security contributions have been deducted. This salary may be also reduced depending of the age of the person (under 18).
- the qualified minimum social wage amounts to 2.398€ gross and becomes 2.107€ net after social security contributions.
Since August 1, 2018, following the triggering of the indexation, salary and pension salaries have automatically increased by 2.5%. It means that the minimum monthly salary in Luxembourg is now €2,048.54 for over 18s, with a minimum hourly rate of €11.8413. For qualified people, the minimum salary is now €2,458.25.
The Tax system in Luxembourg
Taxes in Luxembourg are directly deducted for the above mentioned incomes when the employer pays the salary. For example :
A bachelor without children earning the qualified SSM will pay 140 € for the income tax. The net salary after taxes and social contributions will be therefore just under 2000 €.
A married person with children earning 3000 € gross per month will pay only 45 € income tax. The net salary after contribution and taxes will be just under 2600 €.
These calculations do not take into account certain other incomes that could be collected by the employee such as the various benefits (company car) and travel expenses.
Average wages in Luxembourg
However, average wages in Luxembourg are high and show significant differences between sectors of activity (STATEC data):
Industry: 49,311 €
Construction: 39,060 €
Services: 58,614 €
Trade, repair of automobiles: 42.287 €
Financial activities and insurance: € 86,453 €
* Salary (given on 01/01/2017 for a period of 40 hours).
Source: Administration des contributions directes.
Tax Calculator to calculate your net salary in Luxembourg
In wage negotiations to find a job, we always talk about the gross salary, ie before deductions of the various social contributions and especially before tax, since this one is deducted at source in Luxembourg.
These deductions vary according to the instructions established annually by the Ministry of Finance (taxes) and according to your personal situation.
Using the CSC calculation tool, calculate your net salary from your gross salary.