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From
$249/month
$49/month
2% of gross salary / month
Horizons ensures day-to-day guidance to help your business navigate Luxembourg labor laws and regulations. Horizons also ensures Luxembourg payroll is processed on time, and that taxes are withheld as required.
As the Luxembourg Employer of Record, Horizons is responsible for employee income tax withholding, payment of payroll taxes to state authorities, and submission of tax returns to the Luxembourg Tax Office.
Partnering with our Luxembourg EOR is the quickest and most cost-effective way to enter the Luxembourg market.
Note, a Luxembourg Employer of Record is also known as a Luxembourg Professional Employer Organization (PEO).
Hire in Luxembourg, and pay employees through our platform or app.
Our Luxembourg EOR solution is the most affordable on the market.
Fast onboarding in Luxembourg, hire in as little as 24 hours.
We draft labor contracts compliant with Luxembourg labor law.
We administer all mandatory benefits and contributions in Luxembourg.
It doesn’t stop with Luxembourg — we are an international EOR
We strongly recommend producing a formal employment contract when hiring any employees in Luxembourg. English is widely spoken, but contracts should be in one of the official local languages (Luxembourgish, German, and French), and use the local currency of the Euro. Contracts should also include any relevant information about the agreement, such as salary/wage, working hours, sick leave entitlement, and so on.
By partnering with our Luxembourg EOR, Horizons’ team of local experts can provide assistance for drafting strong employment contracts that are compliant with local regulations.
2 weeks (min.) – 6 months (max.)
2 months (standard)
After 5+ years’ service: 4 months’ salary
2 weeks (min.) – 6 months (max.)
2 months (standard)
After 5+ years’ service: 4 months’ salary
The normal maximum working week in Luxembourg is 40 hours. Beyond this, workers must be paid at an overtime rate of at least 140% of normal pay. These limits do not apply to employees in certain roles, such as senior management.
Luxembourg has a range of national public holidays that are celebrated annually. In 2025 these holidays are:
| Date | Holiday name |
|---|---|
| 1 Jan 2025 | New Year’s Day |
| 18 Apr 2025 | Good Friday |
| 20 Apr 2025 | Easter Sunday |
| 21 Apr 2025 | Easter Monday |
| 1 May 2025 | Labour Day / May Day |
| 9 May 2025 | Europe Day |
| 29 May 2025 | Ascension Day |
| 9 Jun 2025 | Whit Monday |
| 23 Jun 2025 | National Day |
| 15 Aug 2025 | Assumption of Mary |
| 1 Nov 2025 | All Saints’ Day |
| 25 Dec 2025 | Christmas Day |
| 26 Dec 2025 | St. Stephen’s Day |
Employees in Luxembourg who have been working for the same employer for at least three months are entitled to a minimum of 25 days of paid vacation leave. If they are unable to use the leave in the same year, it can be carried over until the the end of March the following year.
Employees who cannot work due to sickness must provide a medical note on the third day of absence. Employees are then protected from dismissal for the following 26 weeks. Workers are also entitled to full pay and benefits for three months following the month that their sickness began. Beyond this, employees are compensated partially by the state and their employer must make up the difference to equal normal pay. This can continue for up to one year after the sickness began.
Female employees in Luxembourg can take paid maternity leave for 16 to 20 weeks. The compensation is covered by the state up to a maximum payment of 5X minimum wage, and the rest of the employee’s salary is paid by the employer.
In some cases, both the mother and father are entitled to six months of parental leave (full-time) or one year of parental leave (part-time) until their child is five years old. This time can be compensated by the state.
Employers in Luxembourg must provide notice of termination ranging from two to six months when terminating indefinite-term contracts. Employees are legally entitled to a severance payment if they have been with the employer for at least five years, and the payment can range from one to 12 months based on their level of seniority.
Employees who resign from a role must provide half of the normal notice period, and are not entitled to severance or unemployment benefits.
Different rules apply for employees in probationary periods, which can vary from two weeks up to one year in length, and employees may not be entitled to any notice of termination during this time.
Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time. Horizons’ Luxembourg EOR can mitigate risk for foreign companies and provide guidance through this process.
Employers and employees in Luxembourg must both contribute towards social security funds, which cover things like pensions, sick pay, maternity pay, accident insurance, and so on. Employers generally need to contribute around 12.5-15.5% (with a maximum limit).
Employees in Luxembourg must pay a solidarity tax of 7% (9% for some higher earners), and are also taxed progressively at a rate that depends on income level.
Companies in Luxembourg must pay several taxes, including a solidarity tax, a municipal tax, and a corporate tax on profits. In total, the total contribution is 24.94% for most businesses (as of 2019/20).
| Minimum Wage Country Comparison Chart | (Per month in USD) |
| Switzerland (Geneva) | $4,000 |
| Italy | $2,255 |
| Australia | $1996 |
| Algeria | $156 |
| Uzbekistan | $22 |
Many employees in Luxembourg expect benefits packages with their jobs, so you may want to set up a system when hiring in the country. However, establishing a benefits system in Luxembourg can be a difficult process, particularly if you are unfamiliar with the country’s unique laws and administrative processes.
Horizons can help to significantly simplify this phase of your Luxembourg expansion by providing benefit management outsourcing. Our team can advise you and handle the setup of your benefit scheme, enabling you to focus on expanding your organization in Luxembourg.
Hire borderless talent with Horizons
With Horizons, you get quick service, transparent pricing, and expert support.
Generally speaking, the terms “Luxembourg PEO” and “Luxembourg EOR” are used interchangeably.
In most cases, Horizons’ Luxembourg EOR can hire & onboard your employee within 24 hours. The actual start date of the employee will depend on their notice period obligation to their previous employer as well as any relevant hiring rules in Luxembourg.
It is possible to get a work visa in Luxembourg. Horizons’ Global Mobility team is a dedicated team of work visa experts. They assess the details of each case to determine feasibility and costs before Horizons applies for the work visa on behalf of your employee. If the Global Mobility team determines that your case is feasible, the process is smooth and transparent. Visa spots in Luxembourg are limited, however—get started today to secure your employees’ visa spot.
Holiday Schedule in Luxembourg [2025]
