Luxembourg wage indexation: 2.5% increase from 1 May 2025

Luxembourg continues to follow the principle of protecting the purchasing power of citizens: from 1 May 2025, the next automatic indexation of salaries, pensions and social benefits will come into effect in the country. The reason for this was the exceeding of the threshold value of the Consumer Price Index (IPCN), calculated on the basis of 1948.

According to preliminary STATEC data, annual inflation in April 2025 was 1.7 per cent. As a result, the average semi-annual value of the index exceeded the established threshold of 1,013.46 points. This automatically triggered the wage recalculation mechanism: the new calculation point of the wage scale will be 968.04 points (previously 944.43).

The bottom line: all wages, pensions and social benefits will rise by 2.5% from 1 May 2025.

Automatic indexation is one of the pillars of the Luxembourg social contract, aimed at preserving the real level of the population's income against inflation. This mechanism is enshrined in legislation and does not require additional parliamentary decisions on a case-by-case basis.

The final and detailed inflation results for April will be officially released on 7 May after the Consumer Price Index Commission meeting.