New social parameters on 1st September 2023
In Brief
Following the 2.5% automatic wage indexation, which applies from 1 September 2023 with a new index fixed at 944.43, you will find below a summary of the main social parameters applicable on this date. Changes are identified in bold.
The cost of this indexation will be offset in 2024 under the latest Tripartite Agreements. You will find below the details of these measures voted on 26th July 2023.
Social minimum salaries
INDEX 944.43 |
EUR |
EUR |
Non-qualified worker: |
Hourly rate |
Monthly Gross salary |
For 18 years old and more |
14.8609 |
2,570.93 |
From 17 till 18 years old: 80% |
11.8887 |
2,056.74 |
From 15 till 17 years old: 75% |
11.1456 |
1,928.20 |
Qualified worker |
17.8330 |
3,085.11 |
Remuneration of pupils, students employed during the school holidays and trainees
INDEX 944.43 |
EUR |
EUR |
Pupils and students during the school holidays |
Hourly rate |
Social minimum wage full time |
Who have reached 18 years old |
11.8887 |
2,056.74 |
Who have reached 17 years old |
9.5109 |
1,645.39 |
Who have reached 15 and 16 years old |
8.9165 |
1,542.56 |
INDEX 944.43 |
EUR |
EUR |
Trainees |
Hourly rate |
Social minimum wage full time |
30% of the minimum social wage for unskilled employees if compulsory internship of ≥ 4 weeks |
4.4583 |
771.28 |
Unskilled trainees |
|
|
40% of the minimum social wage for unskilled employees if practical training of 4-12 weeks |
5.9443 |
1,028.37 |
75% of the minimum social wage for unskilled employees if practical training of 12 up to 26 weeks |
11.1456 |
1,928.20 |
Trainees who have successfully completed a first cycle of higher education (BTS or bachelor) |
|
|
40% of the minimum social wage for qualified employees if practical training of 4 – 12 weeks |
7.1332 |
1,234.05 |
75% of the minimum social wage for qualified employees if practical training of 12 up to 26 weeks |
13.3748 |
2,313.83 |
Maximum basis for social contributions (except dependence insurance not limited to any cap) at current index 944.43
Monthly maximum in EUR |
12,854.64 |
|
Annual maximum in EUR |
150,532.10 |
Unchanged employee’s rates for social contributions in Luxembourg on 1st September 2023
In % |
For periodic remuneration |
For non-periodic remuneration and fringe benefits |
Illness health expense |
2.80 |
2.80 |
Illness cash benefits |
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.
Unchanged employer’s rates for social contributions in Luxembourg on 1st September 2023
In % |
For periodic remuneration |
For non-periodic remuneration and fringe benefits |
Illness health expense |
2.80 |
2.80 |
Illness cash benefits |
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 1st April Y-2 to 31st March Y-1.
Compensation for the cost of the third wage indexation of 2023
In application of the Tripartite Agreements between the government, the UEL and the Unions, the law of 26 July 2023 provides for a reduction in the rate of employers' contributions of the Employer’s mutuality by 1.34% in 2024 to offset the cost to employers of a third wage indexation.
However, for the first two classes whose rate is less than 1.34%, this rate reduction must be spread out:
- for Class 1: over 3 fiscal years with a contribution rate of 0.01% for 2024, 0.04% for 2025 and 0.35% for 2026;
- for Class 2, the rate should be 0.01% for 2024 and 1.10% for 2025;
- for Classes 3 and 4, the rate reduction will in principle be fully absorbed in 2024 with an estimated rate of 0.42% and 1.36% respectively.
Since the Employers’ mutuality rates are calculated each year, and only known at the beginning of the year, the above rates are only estimates at this stage.
Contact us
Vinciane Istace
Advisory Partner, People Experience and Change Leader | People Process Outsourcing Leader, PwC Luxembourg
Tel: +352 621 332 112
Advisory Director, People Process Outsourcing (PPO), PwC Luxembourg
Tel: +352 621 336 244