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
(no internship)

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
(minimum 4 weeks internship)

 

 

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.