Salaries in Luxembourg

When you are looking for work in another country like Luxembourg, it is important to get some simple and practical pointers quickly on the levels of pay on offer.
Here you will find useful information about salaries:

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

Remuneration levels in Luxembourg

The salary is freely determined between the employer and the employee during the recruitment process or during the contract. The salary is the compensation for the work done. It is negotiated between the job seeker and the hiring manager.

In Luxembourg, however, there is a minimum social wage (SSM) that must be respected by the employer.

Difference between gross and net salary

In salary negotiations, we always talk about gross salary. This is the theoretical salary, i.e. before deduction of the various social contributions and especially before taxes. This salary does not take into account any benefits in kind that may be negotiated.

From the negotiated gross salary, several charges must be deducted to obtain the net salary, actually paid to the employee.

Social security contributions

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

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

They amount to approximately 12.5% of the gross salary payable by the employee. The company also contributes the same amount for these insurances and the accident insurance.

Income tax withheld at source

In Luxembourg, the tax is deducted at source by your employer from your gross salary.

The latter deducts the taxes due by each employee on the basis of the tax card sent annually by the Administration following the taxpayer’s declarations.

Learn more about income taxes in Luxembourg.

In summary, the salary received by the employee will be a salary net of all social contributions and taxes.

Calculation of net salary

Social minimum wage (SSM)

The social minimum wage is determined at two levels: minimum wage for unskilled workers and qualified minimum wage.

As of February 1, 2023, following a further increase in the index, the monthly social salary will increase by 2.5% to 2,447.07 euros minimum for an unskilled worker over 18 years old and for a full-time job of 40 hours per week .

Salary scale in Luxembourg

Minimum hourly wage in euros minimum monthly wage in euros
Qualified employee over 18 years old 16,9738 2.936,48
Unskilled employee over 18 years old 14,1449 2.447,07
Employee 17 to 18 years old 11,3159 1.957,65
Employee 15 to 17 years old 10,6087 1.835,30

The qualification must be justified by an official certification, or by a minimum number of years of professional experience. Eventually, these rules are governed by the collective agreements of the sector in which one works.

Indexation of wages to the cost of living

The social minima are adapted by the administration according to average earnings. If these minimums are increased, employers must increase the employees concerned accordingly.

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

Employers are required to increase the compensation of all their employees accordingly. If not, they are subject to a fine.

Remuneration of pupils and students during school vacations

Students in seasonal employment may not be paid less than 80% of the social minimum wage.

As of February 1, 2023, and for the next school vacations, students can expect to earn, depending on their age group, at least the following amounts

Minimum hourly wage in euros minimum monthly wage in euros
Pupil and student over 18 years old 11,3159 1.957,65
Pupil and student from 17 to 18 years old 9,0527 1.566,12
Employee 15 to 17 years old 8,4869 1.468,24

Average salaries by sector of activity

The average salary paid in Luxembourg is 75,305 USD according to the latest OECD statistics of 2021. Luxembourg is thus in first place ahead of the United States 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 and much higher than in neighboring countries. This clearly explains the number of cross-border workers, 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 must be tempered by the atypical nature of the Luxembourg job market.

  • Financial and insurance activities: 99,250 euros per year
  • Education: 98,835 euros. Luxembourg teachers are the best paid compared to their European colleagues.
  • Specialized, scientific and technical activities: 88,721 euros
  • Public administration: 86,582 euros.

Source: Administration of direct taxes.

To learn more, check out the compensation and hiring trends by industry study:

Which sectors of activity are recruiting, who and how many?

Gender pay gap

In Luxembourg, the wage gap between men and women is now 0.7%.

Gap gender in Luxembourg

The gender pay gap in Luxembourg is currently the lowest in Europe.

In the latest study published by Eurostat, Luxembourg is ahead of Romania and Slovenia, at 2.4% and 3.1% respectively. In Europe, the wage gap between men and women is 13% on average. This means that when a man earns 1 euro, a woman earns 87 cents for an equivalent position.

Luxembourg reaches the maximum score of 100 in a World Bank study in 2019, Women, Business and the Law 2019: a decade of reforms. Only 6 countries, Belgium, Denmark, France, Latvia, Sweden and Luxembourg have been credited with this score of 100.
This rating attests to gender equality in various areas including transportation, access to employment, wages, marriage, maternity, and pension benefits.

Gender equality policy in Luxembourg

The Luxembourg government has been committed to promoting gender equality for over 20 years. This is true at all levels of society.

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

A portal for equality between women and men has also been set up. It deals with equality on different themes 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 the institutions and with the partners.

To complete this information, please consult our pages on the job market.