Wage gross/net and taxation in Luxembourg
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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

Minimum social wage

In Luxembourg, a minimum social wage (SSM) exists. The minimum social wage in Luxembourg is composed of two levels : unqualified and qualified minimum social wage.

  • Since 1 January 2020, the unqualified minimum social wage has been €12,3815 per hour, which is equivalent to €2,141.99 gross per month for a full time job (40 hours/month) This salary may be reduced according to the person’s age (under 18 years of age). See summer jobs.
  • The minimum qualified social wage is €2,570.39 gross per month.

Gross / net salary, payroll tax

The social security contributions paid by the employee cover health insurance, old-age pension insurance and long-term care insurance.

Taxes in Luxembourg are directly deducted for the above mentioned incomes when the employer pays the salary.

Taxes : who pays and how much ?

These calculations do not take into account certain other income that could be received by the employee such as benefits in kind (company car, etc.) and travel expenses.

Average wages paid in Luxembourg

The average salary paid in Luxembourg is, according to the latest statistics, the highest among the 34 OECD countries. 
In 2017, it amounted to an average of $63,062 per year, ahead of Switzerland ($62,283), Iceland ($61,787) and the United States ($60,558). Source OECD.

By sectors of activity

However, average wages in Luxembourg are high and show significant differences between sectors of activity (STATEC data):

  • Industry: 53.009 €
  • Construction: 42.847 €
  • Services: 63.457 €
  • Trade, repair of automobiles: 46.149 €
  • Financial activities and insurance: 98.122 €

* Salary 2018 for a period of 40 hours).

More information about wages by secteur and trade (2018 study)

Gender pay gap

In Europe, the wage gap between men and women is 16% on average. This means that when a man earns 1 euro, a woman earns 84 cents for an equivalent position. In this context, Luxembourg is a good pupil, since in the Grand Duchy the wage gap between men and women is 5.4%.

Laws are in force in favour of gender equality and a specific portal on gender equality in Luxembourg has been created by the Ministry.

For more information about job market in Luxembourg

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. More information about taxation in Luxembourg.