Salaries in Luxembourg: Complete Guide

Are you thinking about working in Luxembourg? Understanding salaries and tax regulations is essential for integrating into this dynamic market. Here is everything you need to know about salaries in the Grand Duchy of Luxembourg. Here you will find useful information about salaries in Luxembourg

• calculating your net salary based on the gross salary announced by your employer,
• legal minimum wage
• gender pay gaps
• average salaries by sector of activity.

Principle of remuneration paid in Luxembourg

Salaries are freely agreed between the employer and the employee. They represent compensation for work performed. Negotiations take place during the recruitment process between the job seeker and the recruiter. Negotiations may also take place during the contract period.

Difference between gross and net wages in Luxembourg

Several charges must be deducted from the negotiated gross salary to obtain the net salary actually paid to the employee.
The gross salary is a theoretical salary, i.e., before deductions for various social security contributions and, above all, before tax is calculated. It is important to note that tax is deducted at source by the employer.

In addition, gross salary does not take into account any benefits in kind that may be negotiated in addition to the basic salary.

To convert your negotiated gross salary into the net salary actually paid at the end of the month, deduct:

• Approximately 13% for social security contributions (health insurance, old age pension, unemployment insurance).
• Income tax, calculated by the employer based on your tax card.

Social security contributions deducted from gross salary in Luxembourg

Social security contributions are the social security contributions paid to the CCSS by the employee and the employer.

Social security contributions cover health insurance, old-age pension insurance, andunemployment insurance. These deductions vary according to the instructions issued annually by the Ministry of Finance.

For employees, a portion of contributions is deducted directly from gross salary each month before net salary is calculated. The main rates are:

Rates deducted from gross salary (employee contributions)

Insurance / Branch	Rate (%)
Health insurance – healthcare	2.80
Health insurance – cash benefits	0.25
Pension insurance (retirement)	8.50
Long-term care insurance	1.40

Please note: some rates apply up to a maximum contributory salary (e.g. for pensions and certain types of insurance), which means that very high incomes are not affected above this threshold.

Thanks to these contributions, you will continue to receive full or partial income in these various cases, including when you are unable to work due to illness.

Example for an average gross annual salary of €80,000

Gross monthly salary: ≈ $6,667
Estimated net monthly salary: approximately €5,250 to €5,300 net per month after deduction of mandatory social security contributions (health, pension, long-term care) and progressive income tax.

It should be noted that in certain cases, particularly when hiring seniors (over 50), the company is reimbursed for its social security contributions.

Income tax withheld at source in Luxembourg

In Luxembourg, tax is deducted at source by your employer.

The employer calculates the taxes owed by the employee on the basis of the tax card sent annually by the Administration following the taxpayer's declarations. The employer deducts this tax amount from the gross salary and pays a net salary to the employee.

Find out more about income tax in Luxembourg.

In summary, the salary received by the employee is a net salary after social security contributions and taxes. The tax system is based on a two-stage taxation process. Find advice from our experts here to help you understand this tax collection system and optimize your tax situation.

Calculating net salary in Luxembourg

Find out more about taxation in Luxembourg.

Social minimum wage (SSM) in Luxembourg in 2025

In Luxembourg, employers must pay their employees a minimum social wage (SSM), based on the employee's qualifications and age, for a full-time 40-hour working week.

Minimum wage scale in Luxembourg

Since May 1, 2025, the gross monthly minimum wage (for full-time work of 40 hours per week) has been as follows:

• Unskilled workers: €2,703.74 - 100% of the SSM
• Skilled workers: €3,244.48 - 120% of the SSM
• Minors (17-18 years old): €2,116.99 - 80% of the SSM
• Minors (15-17 years old): €2,027.80 - 75% of the SSM

Qualifications must be proven by official certification or a minimum number of years of professional experience (10 years in the profession in question or at least 6 years of practical training). These rules may be governed by collective agreements in the sector in which the worker is employed.

Students working part-time on fixed-term contracts outside of school holidays are paid on the basis of the minimum social wage.

Salary indexation: a unique system

All wages in Luxembourg are indexed to inflation. If the price index rises by 2.5%, all wages are automatically adjusted. This feature protects workers' purchasing power.

The minimum social benefits are adjusted by the administration in line with average wages. If these minimum benefits increase, employers must increase the wages of the employees concerned accordingly.

This increase is intended to reflect the cost of living. Employers are also obliged to increase the remuneration of all their employees accordingly. Failure to do so will result in a fine.

Working as a student in Luxembourg

Pupils and students in seasonal jobs receive at least 80% of the minimum social wage.

Similarly, pupils and students in seasonal employment cannot be paid less than 80% of the minimum social wage. An 18-year-old will therefore receive approximately €2,110 gross per month.

Why apply for a job, including in the summer?

Average salaries by sector in Luxembourg

Average salaries in Luxembourg are high compared to the European average. They are also much higher than in neighboring countries. This clearly explains why so many French, German, and Belgian cross-border workers come to work in Luxembourg despite the long hours they spend in their cars every day.

In 2024, the average salary was €75,919 gross per year (source: STATEC). Here are the averages by sector:

• Finance and insurance: €100,250/year
• Education: €98,835/year
• Public administration: €104,256/year
• Science and technology: €88,721/year

For more information, see the study on remuneration and recruitment trends by sector of activity.

Gender pay gap

Gender gap appears favorable in Luxembourg

In Luxembourg, women's hourly wages exceed those of men! Since 2021, and for the first time, women have been earning a higher hourly wage than men, with a negative wage gap of -0.2% (source: Eurostat).

The reality of gender inequality in Luxembourg

However, in total annual terms, women earn around 7% less due to a higher proportion of part-time work and lower-paid jobs.

Furthermore, although women have higher levels of education than men, they are less represented in high-paying jobs. Less than 1% of women earn more than €200,000, compared to 2% of men.

Gender equality policy in Luxembourg

The Luxembourg government has been committed to promoting gender equality at all levels of societyfor more than 20 years.

A Ministry for the Advancement of Women was created in 1995, since replaced by the Ministry for Gender Equality (MEGA). The laws enacted aim to ensure this equality.

A Gender Equality portal has also been set up. It deals with equality on various topics, including work, society, and youth.

The CNFL platform , the National Council of Women in Luxembourg, lists the various contacts responsible for gender equality within institutions and with partners.

For more information, see our pages on taxation and trends in the Luxembourg job market.

In a country where salary levels attract an international workforce, it is worth considering the advantages and disadvantages of living in Luxembourg for expatriates. Financial aspects are only part of the equation.