Hire and pay employees in
Luxembourg, hassle-free

The employer cost is generally estimated at 11.94% of the employee's salary.

• Public Pension Fund - 8%
• Sickness and Maternity Benefits Funds (Caisse de maladie soins) - 0.25%
• Work Accident Insurance - 0.75%
• Public Health Insurance (Caisse de maladie soins) - 2.8%
• Onboarding Medical Check and Employee Professional Fitness Care - 0.14%
• Telephone and Internet Allowance - EUR 15

Overtime payment is mandatory for all employees except for Senior Managers. Hours of overtime are paid at 140% of the regular hourly rate. Overtime may be paid as leave-in-lieu of pay (1 hour overtime of overtime equals 1 hour and 30 minutes of time off). 
For additional hours, employees are paid: 

Employees are entitled to 20 weeks of paid leave broken into two parts, antenatal and postnatal. 8 weeks antenatal leave must be taken before the expected date of delivery

The employee will receive 100% of their highest salary during the last 3 months before their leave, and Social Security will be responsible for this pay.

Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.

There is no at-will termination in Luxembourg for employers and termination must be done for just cause.

Compliant terminations include:

• Voluntarily by the employee
• By mutual agreement
• Unilaterally by the employer based on:
  • probation period
  • objective grounds
  • disciplinary dismissal
  • performance due to unsuitability for the job
• By expiration of the contract

The minimum notice period is 30 days and will be increased according to the length of the employment and the type of termination.

Notice upon termination by the Employer:

• 60 days if the length of service is less than 5 years
• 120 days if the length of service is more than 5 years but less than 10 years
• 180 days if the length of service is more than 10 years

Notice upon resignation by the Employee:

• 30 days if the length of service is less than 5 years
• 60 days if the length of service is more than 5 years but less than 10 years
• 90 days if the length of service is more than 10 years

In Luxembourg, all employees who are terminated without appropriate termination notice or have been employed with the company longer than 5 years are entitled to severance pay. Severance pay is 30 days of salary per year of service up to 25 months base compensation.

• From years 5-10 of seniority, 4 months of salary.
• From years 10- 15 of seniority, 2 months of salary.
• From years 15-20 of seniority, 3 months of salary.
• From years 20-25 of seniority, 6 months of salary.
• From years 25-30 of seniority, 9 months of salary.
• From years 30+ of seniority, 12 months of salary.

Luxembourg celebrates 11 national holidays

• National public holidays include:
• New Year's Day
• Easter Monday
• Labour Day
• Europe Day
• Ascension Day
• Whit Monday
• National Day
• Assumption Day
• All Saints' Day
• Christmas Day
• 2nd Day of Christmas

Due to lengthy compliance steps, the onboarding timeline can vary from 2 weeks to 1 month. Documents must be completed 1 day before the start date.

In Luxembourg, new hires must be reported to the national employment agency, ADEM (Agence pour le développement de l'emploi). During the onboarding process, you will receive an additional form to complete, which Deel will use to notify the ADEM. Once the ADEM has confirmed the registration, Deel will be able to send the employment agreement to your employee

Contracts can be in English. They must be in writing and signed by both parties.

A contract must include:

• name
• start date
• length of the employment
• job description
• termination conditions
• monthly salary
• address of work 
• working hours
• holidays
• bonuses
• benefits