Luxembourg
Employment
Payroll
HR & Labor
Immigration
Pension Fund
Employer contributes 8% of the employee’s wages.
Employee contributes 8% of their wages. Contribution ceiling is 9,605 EUR monthly.
Severance Payments
Employee who has been in the company between five to ten years is entitled to severance pay of two months salary. From ten years until fifteen years, they are entitled to three months salary. Between fifteen years up to twenty years, four months of average salary as a severance pay. From twenty years to twenty five years, six months of average salary. From twenty five years up to thirty years, nine months of severance pay. Thirty years and on, the employee is entitled to one year of average salary as a severance pay.
Advance Notice
Employee who has been in the company for less than five years, must provide one month’s advance notice. If they have been in the company from five year until ten years, they must provide two months notice and from ten years and on, they must provide three months notice. Employees can only submit the advance notice either the 1st or 15th of each month.
Termination Procedure
Employer must provide the employee with one month’s notice if the employer has been in the company for less than five years, two month’s notice if they have been in the company from five to ten years, from ten years and more, three months notice.
Sick Days
Employee taking a sick leave must notify the employer on the first day of the leave and submit appropriate medical paperwork. The maximum sick leave period is 26 weeks, after which the employer can terminate the employee. If the employer chooses not to terminate the employee, the employment contract is automatically terminated after 52 weeks of the sick leave. The employer reimburses the employee's full salary until up to the 77th day of the sick leave, afterwards the state will cover until 52 weeks of the leave.
Vacation Days
Employees are entitled to 2.083 days per each month worked in the company, which is maximum 25 days per year.
Additional Employee Withholdings
1) Health Insurance
2) Dependency Insurance
3) Health at Work
4) Accident Insurance
5) Employer’s Mutuality
6) Temporary Tax
1) Employer contributes 3.05%.
2) Employer contributes 0%
3) Employer contributes 0.11%
4) Employer contributes 1%
5) Employer contributes between 0.46% and 2.93% depending on the absenteeism rate from the previous year in the company.
6) Employer contributes 0%.
1) Employee contributes 3.05%.
2) Employee contributes 1.40%.
3) Employee contributes 0%.
4) Employee contributes 0%.
5) Employee contributes 0%.
6) Employee contributes 0.5%.
Social security
Applies to wages and salaries. Is due from both the employer (at a rate of 12%-15%) and the employee (at a rate of 11%). Contributions from both the employers and the employees are computed on a capped basis (app. 115,500 EUR for 2016), and must be withheld by the employer.
Self-employed individuals must register for social security purposes and pay approximately the same rates as combined rates for an employer and an employee.
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