Employee benefitsin Luxembourg

Employees join compulsory health and maternity insurance through the Joint Social Security Centre, which collects contributions for the public insurance bodies. In 2026 healthcare contributions are 2.80% each for employer and employee, plus 0.25% each for cash sickness benefits: 3.05% per side in total. Public insurance covers healthcare and income support under its eligibility rules; it does not eliminate every patient charge. Since June 2026 the general monthly contribution ceiling is EUR 13,856.63.

Employers must affiliate to an occupational health service or establish an in-house service. The Multisector Occupational Health Service provides fitness examinations, risk prevention and workplace-health advice; employers who do not choose another valid arrangement are enrolled automatically. For this service the 2026 published contribution is 0.14% of assessable payroll. Other occupational-health arrangements have their own funding terms. These preventive services are separate from supplementary private medical insurance.

Employers commonly provide free workplace gym access. KPMG Luxembourg and Baloise Luxembourg offer on-site gym facilities and fitness classes. This benefit gives employees access to facilities rather than a standard cash wellness allowance.

Supplementary medical insurance adds cover alongside the public system. Actual employer policies include cover from the first working day and family eligibility. The selected policy determines treatment, dependants, reimbursement limits and employee contributions.

Some employers add dental benefits through an insurance policy. Employees receive the treatment reimbursement specified by that policy, subject to its eligibility, limits and any employee cost-sharing.

Some employers add vision-care insurance or optical support. Policy terms determine eligible examinations, lenses or other expenses and the reimbursement available.

Some employers provide stress-management training, trained mental-health contacts or therapy and coaching allowances. Support depends on the employer’s programme.

Compulsory long-term care insurance supports people who need assistance with everyday living because of dependency. Employees pay a 1.40% contribution. The deduction applies after a monthly allowance equal to one quarter of the unskilled social minimum wage: EUR 692.83 from June 2026. Unlike the general social-insurance base, long-term care contributions do not use the five-times-minimum-wage ceiling.

Compulsory accident insurance protects against work-related accidents and occupational disease, including eligible commuting accidents. It covers treatment and the applicable incapacity, disability and survivor benefits. Employers fund it: the 2026 base contribution is 0.65% of assessable earnings, adjusted by the employer’s accident-rating factor. This is separate from private accident insurance. Employees must notify the employer immediately after a work or commuting accident so that it can be reported to the Accident Insurance Association.

The public pension system provides retirement protection based on the insured career. In 2026 the employer and employee each contribute 8.50% of covered earnings. An ordinary old-age pension starts at 65 after at least 120 months of qualifying compulsory, continued, voluntary or retroactively purchased insurance. The pension amount depends on the insured career and contributions. Early retirement follows separate conditions.

Eligible involuntarily unemployed residents claim through the National Employment Agency. Benefits normally replace 80% of prior gross pay, rising to 85% with a qualifying dependent child. Payment lasts for the qualifying employment period, generally up to twelve months, with specified extensions. Caps are 2.5 times the social minimum wage during the first six months, twice afterwards and 1.5 times during an extension. Residence, work history, availability and active job-search requirements apply; fully unemployed cross-border workers usually claim in their residence country.

Employees dismissed with notice after at least five years of service receive severance separately from notice pay. The statutory salary multiples are one month for five to under ten years, two for ten to under fifteen, three for fifteen to under twenty, six for twenty to under twenty-five, nine for twenty-five to under thirty, and twelve from thirty years. Employers with fewer than twenty staff may choose a total notice period of five, eight, nine, twelve, fifteen or eighteen months respectively instead of severance, stating the choice in the dismissal letter. The salary basis uses the preceding twelve months and excludes overtime, bonuses and incidental expenses.

Employer supplementary pensions add retirement, death or disability protection to the public pension. They are common among employers with several hundred staff. Scheme terms set funding and employee eligibility. Baloise Luxembourg enrols staff from joining, while KPMG Luxembourg contributes for assistant-manager-level staff and above after three years. These are company-specific eligibility arrangements.

Eligible disabled workers, disabled war veterans and victims of occupational accidents receive 6 extra working days of annual leave, reimbursed by the State. Mining workers receive 3 additional days. An employee or apprentice who cannot receive 44 consecutive hours of weekly rest receives one additional leave day for each eight-week period without that rest.

Employees receive at least 26 working days of paid annual leave, accruing at one twelfth of the annual entitlement for each full month of service. Leave is generally available after three uninterrupted months of employment; part-time leave is adjusted to the work schedule. Employer approval balances the employee’s wishes and business needs. Holiday pay uses average remuneration over the preceding three months, or twelve months for materially variable pay, excluding non-recurring bonuses. Unused entitlement is paid when employment ends.

Annual leave should normally be used during the year. Unused first-year entitlement can be carried to 31 December of the following year at the employee’s request. Leave prevented by business needs or colleagues’ justified wishes can carry to 31 March. Sickness and family-leave situations have separate protections. Employers may agree more generous carry-over arrangements.

Employers contribute to a mutual insurance arrangement that reimburses eligible salary-continuation costs during sickness. In 2026 its four published contribution classes are 0.23%, 0.95%, 1.56% and 2.66% of assessable earnings. The assigned class determines the employer’s rate; these are employer costs rather than employee deductions.

Employees must notify their employer on the first day of illness and provide the required medical certificate. The employer continues full pay through the end of the month in which the 77th sickness day is reached over an 18-month reference period. The National Health Fund then pays the applicable cash sickness benefit. Benefits are limited to 78 weeks of incapacity in a 104-week period. The fund uses the highest basic salary in the preceding three months and eligible variable supplements averaged over twelve months; overtime, occasional bonuses and benefits in kind are excluded. The fund’s payment ceiling is five times the social minimum wage. The separate 26-week dismissal-protection period is not the maximum sick-pay duration.

Each working parent can take paid leave when their sick child needs their presence: twelve days per child before age four, eighteen days from age four until the thirteenth birthday, and five days for a hospitalised child aged thirteen to under eighteen. These allowances apply across each age band, not each year. Parents cannot use this leave simultaneously. A medical certificate is required even for one day. Special disability conditions double the allowance and remove specified age or hospitalisation restrictions; exceptionally serious illness can justify an extension of up to 52 weeks in 104 weeks.

Paid special leave includes three working days for the employee’s marriage and one for a civil partnership; one day for a child’s marriage; three days for the death of a spouse, partner or first-degree relative of the employee or their spouse/partner; one day for a second-degree relative; and five days for the death of a minor child. Moving house gives two days, normally once per three years with the same employer unless the move is work-related. Urgent family illness or accident requiring immediate presence gives one day per twelve-month period.

Employees can take up to forty hours of paid carers leave during a twelve-month employment reference period to assist a family member or household member who needs considerable care for a serious medical reason. This equals five days at a forty-hour workweek and is prorated for shorter schedules. Notify the employer by the day of absence and supply the medical and relationship/residence evidence by the third day. The State reimburses 50% of eligible employer salary costs on application.

Eligible workers pursuing cultural activities outside their main occupation can apply for paid cultural leave, usually after six months of service or affiliation and at least two months before the event. Cultural actors have up to twelve days annually. Administrative quotas belong to the organisation: national federations/networks receive five or ten days depending on whether affiliated membership is below or at least 1,000; associations receive two, three or four days for membership below 50, 50–200 or above 200. Designated-participant quotas are fifty days per national federation/network and ten per association. These are not individual annual entitlements. Private-sector compensation uses average daily pay, capped at four times the social minimum wage, with State reimbursement.

Employers can offer more annual leave than the statutory minimum. KPMG Luxembourg provides at least twenty-eight days, rising to thirty-three for assistant-manager-level staff and above and thirty-five for leadership. Baloise Luxembourg provides 35.5 days annually. These amounts apply to the respective employers’ policies.

Some employers provide paid time for volunteering. KPMG Luxembourg allows up to four working hours per month for volunteering activities.

Eligible birth parents receive 20 weeks of maternity leave: eight weeks before the expected birth and twelve afterwards. At least six months of compulsory health and maternity insurance in the preceding twelve months are required for the cash benefit. The National Health Fund pays the statutory benefit using the sickness-benefit calculation, capped at five times the social minimum wage. The medical certificate showing the due date must be issued during the final twelve weeks of pregnancy and sent to the employer and fund. Pregnancy protections also cover dismissal and hazardous work.

Fathers and legally recognised second parents receive 80 hours of paid leave for a 40-hour workweek, equivalent to ten working days, prorated for shorter schedules. The leave must be taken within two months of birth or the qualifying adoption event. Employees should notify the employer in writing two months in advance. Late notification no longer automatically reduces the entitlement to two days: absent agreement, leave is taken continuously immediately after the event. The employer advances pay and can reclaim the eligible cost from the State from the 17th hour; the reimbursement salary base is capped at five times the social minimum wage.

One eligible adoptive parent can take twelve weeks of adoption leave when adopting a child under twelve. At least six months of compulsory health and maternity insurance during the previous twelve months are required. The National Health Fund pays an allowance based on the sickness-benefit calculation, between the social minimum wage and five times that wage. The other parent’s ten-day special adoption leave follows separate conditions for a child under sixteen.

Each eligible parent has an individual entitlement per child. Full-time leave lasts four or six months. Depending on contracted hours, alternatives include eight or twelve months at half time, four separate months within twenty months, or a weekly reduction over twenty months; part-time and split arrangements require employer agreement. Employees generally need twelve continuous months of social-insurance affiliation and at least ten contracted hours weekly. One parent’s first leave follows maternity or adoption leave; the second is normally taken before the child turns six, with extended timing for adoption. The Children’s Future Fund pays replacement income based on prior average earnings. From June 2026 the full-time monthly range is EUR 2,771.33–4,618.88; part-time support is prorated.

The Children’s Future Fund pays a monthly allowance to help eligible households meet child-raising costs. Eligibility generally continues from birth to age eighteen, with specified secondary-education or apprenticeship extensions up to twenty-five. Residence and international coordination determine entitlement; a cross-border worker can receive a differential amount after benefits in the residence country. Under the post-August-2016 system, the June 2026 base is EUR 315.04 per child monthly, with age additions of EUR 23.81 for ages six to eleven and EUR 59.44 from twelve. Older protected family groups use transitional amounts.

Some expatriate packages help pay children’s tuition fees. The assignment agreement sets eligible children, schools and costs.

Employees have 11 statutory public holidays, separate from annual leave. A holiday on a day the employee would normally not work creates compensatory leave. Work on a holiday is paid with a 100% supplement for hours worked in addition to the applicable ordinary entitlement; the precise total and compensatory time depend on the normal schedule and whether the day is Sunday. Good Friday and Christmas Eve afternoon are bank-sector days rather than universal statutory holidays.

A thirteenth-month salary is a year-end payment equivalent to an additional month of pay where the contract, collective agreement or established company practice provides it. It is common in banking, insurance and financial services. It is not a universal statutory bonus.

Employers can award an annual performance bonus based on the employee’s contribution, team results and business performance. Role eligibility, targets and payment terms determine the award.

Some employers pay a profit-sharing bonus linked to business performance. The plan sets the calculation, eligibility and payment timing.

Domestic buses, trams and second-class trains are free for everyone, including employees, contractors and visitors. This is a public transport policy rather than an employer-paid perk. First-class and cross-border travel can still require tickets; domestic free transport does not automatically cover the foreign part of a commute.

For regular telework, the employer supplies the equipment needed to do the job and provides appropriate technical support where needed. The generally binding telework agreement distinguishes regular from occasional work at a distance. Occasional telework does not carry the same automatic equipment obligation, although employers can agree practical arrangements.

Employers meet costs directly generated by regular telework, particularly communications. Employer and employee can agree a monthly lump sum in writing. The obligation does not establish a universal euro allowance and does not apply in the same way to occasional telework.

Eligible employees living in another signatory state can remain in the employer-state social-security system while teleworking in their residence state for at least 25% but less than 50% of total working time under the cross-border framework agreement. Employer application and the applicable certificate are required. Other activities and non-signatory states can disqualify the arrangement. This framework does not apply to self-employed people and does not set the separate income-tax treaty thresholds.

Eligible workers can use up to eighty days of individual training leave over their working life, with a maximum of twenty days in a two-year period and at least one day per application. Approved training hours determine the leave: twenty-four course hours normally generate one leave day. Employees receive average daily pay, capped at four times the social minimum wage; the State reimburses eligible employer costs. Self-employed applicants receive compensation directly under separate income-based rules.

Employers can provide digital meal vouchers to help pay for food. KPMG Luxembourg provides EUR 15 per working day with an employee contribution. Meal vouchers are an employer benefit, with value and eligibility set by the applicable arrangement.

Some employers provide a monthly travel allowance. The employer sets the covered journeys and payment; public free domestic transport remains a separate benefit.

Some employers make a company vehicle available for private use as well as work. The arrangement defines access and permitted use.

Some employers allow flexible hours or part-time patterns. Baloise Luxembourg provides a 6 a.m.–10 p.m. flexible-hours window. This is a window for arranging work, not a sixteen-hour permitted working day; legal work and rest limits apply.

Some employers let staff combine home, office and client-site work. Baloise Luxembourg offers up to two remote days weekly, subject to cross-border rules. The work policy sets schedules and eligibility.

Some expatriate packages include language training to support working and settling in Luxembourg. Funding follows the assignment terms.

Some employers offer personal learning budgets, training platforms or mentoring. The programme determines which skills and activities receive support.

Some expatriate packages cover moving costs and visa assistance. The agreed assignment package defines the expenses and family members supported.

Some expatriate packages compensate for a spouse’s loss of income during an assignment. Eligibility and payment follow the assignment agreement.

Some expatriate assignments include employer accommodation support. The assignment agreement sets the housing benefit and payment terms.

An open-ended employment contract is the standard form for ongoing work. Written terms identify both parties, start date, work location, duties, pay and benefits, working hours, leave, notice and any trial period or applicable collective agreement. A fixed-term contract is for a justified temporary task; the general cap is twenty-four months including no more than two renewals. Special statutory categories can differ. Continuing outside valid fixed-term conditions can create an open-ended relationship.

From 1 June 2026, the full-time gross social minimum wage is EUR 2,771.33 monthly for unskilled workers aged 18 or over and EUR 3,325.59 for qualified adult workers. The corresponding hourly amounts are EUR 16.0192 and EUR 19.2231. Workers aged 17–18 receive EUR 2,217.06 monthly; those aged 15–17 receive EUR 2,078.49. Qualification and age determine the applicable floor, and indexation can change these amounts during the year.

An employee whose working day exceeds six hours must receive one or more breaks suited to the work. The law does not set one universal break length; breaks may be paid or unpaid, and only one unpaid break can interrupt the working day. General rest protection gives at least eleven consecutive hours in each twenty-four-hour period and forty-four consecutive hours in each seven-day period. Special working-time regimes and lawful exceptions require separate application.

A night-work supplement of at least 15% is required in collective agreements that regulate night work. It is not a universal statutory supplement for every employer outside a collective agreement. The applicable sector agreement determines the employee’s payment and working-time conditions.

Under the general employee rules, Sunday hours attract a 70% wage supplement. Compensatory rest is a full day for more than four hours of Sunday work and a half day for up to four hours; the pay calculation must avoid double-counting ordinary pay already supplied through paid rest. Overtime supplements can also apply. Young employees receive a 100% Sunday supplement. Hospitality and catering, agriculture and winegrowing have an exception to the supplement: employees working at least twenty Sundays annually receive two extra paid leave days instead.

Normal working time is 8 hours daily and 40 hours weekly. The general maximum including overtime is 10 hours daily and 48 hours weekly. Overtime is normally compensated with 1.5 hours of paid time off for each extra hour; when cash compensation is required, it is paid at 140% of the ordinary hourly wage. Authorisation, working-time arrangements and exclusions, including genuine senior-management rules, affect application.

A trial period must be agreed in writing by the start of work and lasts at least two weeks. The maximum is three months without the relevant vocational qualification, six months for qualified staff, or twelve months above the indexed high-salary threshold. It cannot be renewed. During the first two weeks, unilateral ordinary termination is unavailable. Afterwards, notice equals the number of trial weeks when stated in weeks; for month-based trials it is four days per trial month, with a fifteen-day minimum and one-month maximum. Notice must finish within the trial period.

Ordinary employer dismissal requires a valid personal or business reason and notice of two months below five years of service, four months from five to under ten, and six months from ten years. Employers with at least 150 staff must arrange a preliminary interview; those with at least fifteen must notify the Economic Committee of dismissals for business reasons. Notice starts on the fifteenth of the month if sent before that date, otherwise on the first of the next month. Unused annual leave is compensated on exit. Failure to give required notice creates a separate compensation obligation. On resignation from an open-ended contract, the employee normally gives one month’s notice below five years of service, two months from five to under ten, and three months from ten years. Ordinary resignation generally gives no statutory severance.