ARTICLE
17 December 2024

Upcoming Changes To Luxembourg's Minimum Wage

CL
CMS Luxembourg

Contributor

Active in the Grand-Duchy since 2011, CMS Luxembourg combine a deep understanding of the local market with the global overview of the CMS network. Our 70+ lawyers specialise in Banking & Finance, Corporate/M&A, Investment Funds and Tax but are also able to assist our clients on Commercial, Dispute Resolution, Employment, Capital Markets, ESG as well as Insurance matters.
The Luxembourg Parliament (Chambre des Députés) unanimously adopted Bill 8459 amending the Labor Code on 12 December 2024. It will enter into force on 1st January 2025. A motion to review the mechanism.
Luxembourg Employment and HR

The Luxembourg Parliament (Chambre des Députés) unanimously adopted1 Bill 8459 amending the Labor Code on 12 December 2024. It will enter into force on 1st January 2025.

A motion to review the mechanism on a yearly basis has been introduced. The Parliament decided unanimously to discuss this further in the context of a parliamentary working group.

Bill 8459 providesamong other things:

  • Increase in minimum wage rates:

The minimum wage for unqualified workers will rise by 2.6%, i.e.:

  • Monthly salary: From EUR 2,570.93 to EUR 2,637.79;
  • Hourly rate: From EUR 14.86 to EUR 15.25

For qualified workers, the minimum wage will also increase:

  • Monthly salary: From EUR 3,085.11 to EUR 3,165.35
  • Hourly rate: From EUR 17.83 to EUR 18.30
  • Tax exemption:

Due to the tax amendment (Bill 8414), as of 1st January 2025 non-qualified minimum social wage workers will not be subject to income tax, irrespective of their tax class. For more information reach out to our Tax team.

  • Parallel 2.6% increase in social inclusion income and disability benefits
  • The index on 1st January 2025 remains the same as it has been since 1st September 2023, i.e. 944.43.

The impacts on employers:

These changes are of public order and apply to all employers, who will have to comply with them from 1st January 2025.

There are approximately 70,585 employees currently earning the minimum wage and who will be affected by this change.

It means an annual increase in wages due to this adjustment estimated at EUR 56.90 million.

In addition, the rise in employer contributions, due to both the increase in wages and the adjustment of the contribution ceiling, is estimated at EUR 14.77 million.

Footnote

1 1st vote. A request for an exemption of second vote has been introduced.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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