Social parameters applicable from 1 January 2023

In Brief

Below you will find a summary of the main social parameters applicable between January and March 2023 as well as information on the payment of social contributions for the year 2023.

Revaluation of the minimum social wage and salary indexations for 2023

The minimum social wage was revalued by 3.1% on 1 January 2023.

In addition, the Statec has confirmed the general indexation of wages by 2.5% on 1 February 2023, which leads to a further change in the social parameters on that date. This results in a general increase of all wages, salaries and pensions of 2.5% on 1 February 2023. The new salary index is therefore increased to 898.93 as of February.

This law of public order is also applicable to workers posted on Grand Ducal territory, only for those who receive the minimum social wage applicable by virtue of the law or a collective agreement of general application to an entire branch. 

In addition, the government had postponed the wage indexation due last summer to 1 April 2023. A new wage indexation of +2.5% will then take place again on 1 April this  year. We will inform you of the new parameters once officially  confirmed. 

Finally, the Statec announced in its recent forecasts a possible third indexation of +2.5% for the last quarter of 2023, inflation being estimated at +3.4% this year and +4.8% for 2024.

The changes of the social parameters are identified below in orange and concern the social minimum wages for employees, the rates for the different classes of employers' mutuality and the monthly maximum basis for social contributions.

Social minimum wages for employees

Social minimum wage category

In EUR

INDEX applicable in 

January 2023: 877.01


INDEX applicable in

February and March 2023: 898.93


Hourly rate

Social minimum wage full time

Rounded hourly rate

Social minimum wage full time

Unqualified worked for 18 year old and more (SSM)

13.80

2,387.40

14.15

2,447.07

From 17 till 18 year old : 80 % of SSM

11.04

1,909.92

11.32

1,957.67

From 15 till 17 year old : 75 % of SSM

10.35

1,790.55

10.61

1,835.30

Qualified worker

16.56

2,864.88

16.97

2,936.48

Maximum basis for social contributions (except dependence insurance not limited to any cap) at current index 898.93

Monthly maximum for January 2023 in EUR

11 936,98

 

Monthly maximum for February and March 2023 in EUR

12 235,40

 

 

The annual maximum basis for social contributions will be communicated in April with the next salary indexation.

Unchanged employee’s rates for social contributions in Luxembourg from 1st January 2023

In %

For periodic remuneration

For non-periodic remuneration and fringe benefits

Illness care

2.80

2.80

Illness cash

0.25

 

Pension

8.00

8.00

Dependence (*)

1.40

1.40

(*) Tax allowance equal to one fourth of the non-qualified social minimum salary for minimum 150 hours per month.

Changed employer’s rates for social contributions in Luxembourg on 1st January 2023

In %

For periodic remuneration

For non-periodic remuneration and fringe benefits

Illness care

2.80

2.80

Illness cash

0.25

 

Pension

8.00

8.00

Accident at work

    0.75(*)

    0.75(*)

Health at work

0.14

0.14

Employer Mutuality : Class 1

0.72

 

Employer Mutuality : Class 2

1.22

 

Employer Mutuality : Class 3

1.76

 

Employer Mutuality : Class 4

2.84

 

(*) The rate of Accident at work depends on a bonus/malus coefficient (from 0.85 to 1.5) defined and displayed by the Association d’Assurance Accident. This coefficient is based on the class of risk and the number of accidents at work in the company (professional sickness and commuting accidents are excluded) over the period from 1 April Y-2 to 31 March Y-1 (where Y stands for year)..

The lowest multiplier decreases from 0.9 to 0.85 from 1 January 2023 in order to reward companies with few accidents at work.

Abolition of advance payment on social security contributions

As of 1 January 2023, the advance payment requested from employers for the following month's social security contributions is abolished. This gives employers a revised timing to finance the additional salary indexations planned on 1 February and 1 April 2023. Social contributions are therefore payable two months after the month to which they relate.

However, the advance is still reflected in the social security invoices issued in January and February 2023, as follows (source: ccss.lu):