Hire in Luxembourg
Luxembourg PEO &
Employer of Record
Hire & manage teams remotely in Luxembourg without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.
Business Language
English, Luxembourgish
Salary Currency
Euro (EUR)
Payroll tax
12.22% - 15.33%
Payroll Cycle
Monthly
Time zone
UTC +2
Capital city
Luxembourg
Hire Employees in Luxembourg
The NNRoad Advantage ☺
Pay as you go
Global account manager
Compliance
Fast Onboarding
Foreigner Visas
Platform
Employer of Record in Luxembourg
01.
Candidate Selection
02.
Employee Onboarding
03.
Compliance & Payroll
04.
Payroll Reporting
Recruiting process outsourcing – including but not limited to resume screening, shortlisting candidates, coordination for interviews, and assistance for salary negotiation.
Hiring and termination of employees/local labor contracts (contract administration – engagement, extension termination and conversion to permanent hire).
On-boarding and off-boarding employees following labor law practice.
Complete payroll solution and benefit administration
Employee management – employee record retaining, time keeping, bonus and allowance management, expense and claims, and leave employee database management accordingly to the local law.
Mandatory insurance compliance (i.e. pension, labor and health insurance) according to the local labor laws.
Payment management (Invoicing customers/clients and vendor payments).
Work VISA application assistance, if needed.
Local individual income tax reporting.
Payroll & PEO in Luxembourg
01.
Compliance & Payroll
02.
Payroll Reporting
Registering the necessary company and personnel information for payroll calculation in the payroll software and system
Monthly Payroll Processing
Year-End Adjustment and Annual Declaration
Taxes & Payroll in Luxembourg
Employee Income Taxes:
Individual income taxes in Luxembourg are progressive, with rates ranging from 0% to 42%. Taxable income includes wages, salaries, pensions, and other sources of income. Certain deductions and allowances, such as for social security contributions and dependent children, can reduce taxable income.
Non-residents are taxed only on income earned in Luxembourg. Tax returns must be filed annually by March 31st of the following year, with payment due by July 31st. The tax administration in Luxembourg is known for being efficient and taxpayer-friendly, and there are various online tools and resources available to help individuals understand and comply with their tax obligations.
Income tax in Luxembourg is also based on the individual’s personal situation i.e. the family status and a tax class is granted for this purpose as follows:
Class 1- for single person.
Class 1a- for single parent with dependent children and person of age of at least 65 on 1st of January.
Class 2- for married person, widowed taxpayer (for first three years after the death of spouse) civil partners.
Tax Brackets
Sample Calculation
Employer Costs in Luxembourg
Employer Contribution
Employee Contribution
Social Security
Benefits & Insurance in Luxembourg
Pension Fund
Healthcare Insurance
Working Hours in Luxembourg
Working Hours Per Week
Working hours and overtime in Luxembourg are governed by legislation, with a standard workweek set at 40 hours. However, various collective labor agreements establish shorter working hours in certain industries, and specific regulations may apply to different sectors. Overtime work is generally limited to a maximum of 10 hours per week or 48 hours per month, and employees are entitled to receive additional compensation for such work.
According to the Labor Code of Luxembourg, the rate of overtime pay varies based on the day and time of the work, with higher rates applicable for work performed on Sundays and public holidays. Employers are obliged to maintain records of employees’ working hours and overtime, and employees have the right to access and review these records through the Luxembourg Collective Agreement Database (CCTs). Additionally, employers must ensure that employees receive adequate rest periods and breaks during the workday, and individuals may be eligible for extra time off for work conducted outside normal working hours.
In Luxembourg, an employee is legally permitted to work up to 8 hours per day for a full-time job and a maximum of 40 hours per week according to the European Commission – Employment, Social Affairs & Inclusion. The law stipulates that the daily working time must not exceed 10 hours, nor should the weekly working time surpass 48 hours. These regulations aim to safeguard employee well-being and promote a healthy work-life balance.
Overtime
Termination Laws in Luxembourg
Severance
Notice Period
Employment Contract in Luxembourg
Employment Contract
Probation Period
