Luxembourg: Pay and benefits

Updating authors: Patrick Ries, Julie Erbrech and Ambre Riley, Loyens & Loeff Luxembourg

Original author: Arendt & Medernach

See the legal services provided by the author of International > Luxembourg, including any discounts/offers for subscribers.

Summary

• Employees' remuneration is automatically increased in line with inflation, under a statutory system of pay indexation. (See General)
• Employees must be paid monthly and given a detailed payslip. (See Payment of wages)
• Various rules govern the type and amount of deductions that may be made from an employee's pay. (See Deductions)
• Employers are required to ensure equal remuneration for women and men for equal work or work of equal value, and pay discrimination is prohibited on various other grounds. (See Equal pay)
• A statutory national minimum wage applies to all employees, with separate rates for skilled and unskilled adult employees, and for under-18s. (See Minimum wage)
• All private-sector employees are mandatorily covered by the state pension scheme, which forms part of the social security system. (See Pensions)
• Employers must withhold employees' income tax at source, and employers and employees must pay statutory social security contributions. (See Income tax and social security)
• Employers are required to take out insurance with the Employers' Mutual, a special social security scheme that covers part of their sick pay obligations. (See Sick pay)
• Employers may offer their employees benefits in kind such as meal vouchers and company cars. (see Benefits in kind)