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Overview of Luxembourg

Luxembourg is a small European country between Germany, Belgium and France. It is the second richest country in the world after Qatar. It is one of the safest countries in the world with only 2 jails and a police force about 1.300 strong. Nearly half of the workforce commutes into Luxembourg everyday from the neighbouring countries. Luxembourg is a Grand Duchy and the current reigning Grand Duke is Crown Prince Henri. Luxembourg is a constitutional monarchy with a parliamentary democracy and the Grand Duke is the Head of State. The capital – Luxembourg – is a UNESCO World heritage site. The national language is Luxembourgish but the other official languages are German and French. The highest court of the EU in matters of EU law is located in Luxembourg.

The Luxembourg people appreciate punctuality, meetings tend to be brief and to the point. Luxembourgers dress well at all times and the dress code is professional. A rational and straightforward approach is taken in business. As Luxembourg is a small country, socializing is important as a lot of business is done based on who you know.

Currency of Luxembourg


Health Insurance and the Social Security system of Luxembourg

Luxembourg’s healthcare sector is financed mainly through the social health insurance. All employees contribute on average 5.44 percent of gross income (with a maximum contribution of 6,225 euro) to the Caisse de Maladie, which is deducted directly from their salaries. Half of this is paid by the employer.

The national healthcare system covers the majority of treatments provided by General Practitioner as well as laboratory tests, pregnancy, childbirth, rehabilitation, prescriptions and hospitalisation.

The patient has to pay for the medical fees up front. The receipts are then handed in the Caisse de Maladie and the patient is reimbursed. This amount reimbursed varies from 80 to 100 percent.

Private healthcare is also available and is purchased to pay for services the compulsory healthcare service classes as non essential.

Employer cost of Luxembourg

The cost for an employer to hire someone in Luxembourg is a plus of 14.99% to the gross salary.

Salary and bonuses of Luxembourg

Regular employees are paid either weekly or monthly.

A 13th month salary is paid out at the end of the year. It is also common for employers to pay their employees an additional half months salary before the summer holidays.

Public Holidays in Luxembourg

January 1st – New Year’s Day

moveable – Easter Monday

May 1st – Labour Day

May 9th – Europe Day

moveable – Ascension Day

moveable – Whit Monday

June 23rd – National Day

August 15th – Assumption Day

November 1st – All Saints Day

December 25th – Christmas

December 26th – Boxing Day

Working Hours in Luxembourg

Office hours are from 8.30am to 5.00pm, Monday to Friday.

A regular work week is 40 hours at 8 hours a day.

Overtime has strict rules. An employee can refuse to work overtime. An employee is only allowed to work 2 hours of overtime a day and cannot work more than 8 hours of overtime a day. Overtime must be compensated either by a rate of 150% of the employee’s regular wage or time off.

Vacation in Luxembourg

Luxembourg has a minimum of 26 vacation day per year.

Many businesses close down over the summer in Luxembourg so many employees take their vacation days then

Sick Leave in Luxembourg

On the first 2 days of sickness, the employee is not required to provide a medical certificate. If the employee is sick for more than 3 days, he/she has to provide a medical certificate. In the case of an emergency or a hospitalisation, one has 8 days to provide a medical certificate.

The employer pays the sick benefits for the employee up until the 77th day of illness. The CNS (Caisse Nationale de Santé) takes over after this. As an employee, one receives his full salary up until the 77th day. After this one receives a basic salary.

Termination/Severance in Luxembourg

An employer may terminate an employment contract due to just issues (either an employee’s behaviour or due to operational needs of the company).

After giving notice to the employee, the work relationship ends at the end of the appropriate notice period. If the employee has been with the company for less than 5 years, the notice period is 2 month. Between 5 and 10 years the notice period is 4 months. For more than 10 years, the notice period is 6 months.

The severance pay also reflects the length of time an employee was with the company. If the employee was with the company for less than 5 years, the severance pay is 1 month salary. Between 5 and 10 years of service, the severance pay is 2 months. Between 10 and 15 years of service, it is 3 months and between 15 and 20 years it is 6 months pay.