The Hardest Market · Luxembourg

Luxembourg's HR data

The rules and costs of employing people in Luxembourg (Luxembourg City), from official sources, in English and Japanese.

26.9%women in management (2024, ILO)

1.13×employer's total cost on €80,000 a year, as a multiple of salary

11public holidays (2026)

Take-home pay calculator Japan take-home pay

Employment rules

Statutory annual leave	26 working days
Public holidays (2026)	11 days
Notice of dismissal	Employer 2/4/6 months by service; employee half
Severance required by law	From 5 years: 1-12 months' pay by service
Typical negotiated exit	No official benchmark
Probation	2 weeks to 6 months (12 for high earners)
Working hours	40 h/week, 48 h with overtime
How hard is dismissal?	Moderate: real and serious reasons, given in writing on request

Employer contributions

Health insurance (employer)	3.05%	up to €164,590 a year
Pension insurance (employer)	8.5%	up to €164,590 a year
Accident insurance	0.65%	up to €164,590 a year
Employers' mutual insurance (Mutualité, class 1)	0.23%	up to €164,590 a year
Occupational health service	0.14%	up to €164,590 a year

Employee contributions

Health insurance (employee)	3.05%	up to €164,590 a year
Pension insurance (employee)	8.5%	up to €164,590 a year
Dependency (long-term care) insurance	1.4%	on pay above €8,230 a year

Take-home pay and employer cost by annual salary

Annual salary	Employee contributions	Income tax	Take-home	Employer cost	Cost ÷ salary
€55,000	€7,008	€6,471	€41,521	€61,915	1.13×
€80,000	€10,245	€16,011	€53,744	€90,056	1.13×
€110,000	€14,130	€27,084	€68,786	€123,827	1.13×
€160,000	€20,605	€45,785	€93,610	€180,112	1.13×

Employee in Luxembourg City, Luxembourg tax resident, local national (no inpatriate regime), single with no children (tax class 1), salary only paid evenly as monthly pay (no bonus, 13th month or benefits in kind), calendar tax year 2026. Social security on the 2026 CCSS rates: health 3.05% (benefits in kind 2.8% + cash 0.25%) and pension 8.5% each side, both capped at five times the social minimum wage, plus the employee-only dependency insurance of 1.4% on gross pay above a quarter of the minimum wage. The ceiling and the dependency abatement are annual sums of the January-May and June-December values because the index tranche of 1 June 2026 raised them. Income tax on the class 1 tariff in force since 2025 (unchanged for 2026), with the employment fund surcharge (7%; 9% above €150,000 of taxable income), the minimum flat deductions only (expenses €540, special expenses €480; no commuting deduction, i.e. living close to work) and the 2026 employee tax credit (CIS) and CO2 credit. The temporary 2026 conjunctural tax credit (CIC 2026) is not applied because its law was not yet in force at retrieval. Luxembourg has no municipal income tax.

Sources: [1] [2] [3] Checked 2026-11-08; 2026 rates.