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Salaries in Luxembourg
Luxembourg is famous for its solid economy, high living standard, and one of the highest salaries in Europe. In terms of material living conditions and financial satisfaction, Luxembourg is outperforming the whole European Union. While the average index of this bloc is 6.5, the Grand Duchy's index is 6.9.
How high is the Luxembourg average salary
According to Eurostat, the average salary in Luxembourg is 48,220 euros per year or 4,018 euros per month. While in Europe the usual average wage is 33,500 euros per year or 2,791 euros per month.
In terms of amount, Luxembourg's average salary ranks first among European countries.
However, it is just as important to consider the data on the median salary in Luxembourg. In this regard, the Grand Duchy is also peerless.
According to Eurostat, Luxembourgers are the richest people in the European Union. The median income in the Grand Duchy is 42,482 euros per year net or 3,540 euros per month. This is almost twice as much as the EU average salary of 18,372 euros per year (1,531 euros per month).
Neighboring countries are quite close to the Grand Duchy salaries: in Belgium, the average salary net is 2,155 euros, in Germany — 2,085 euros, and in France — 1,890 euros.
These 2 indicators — the median and the average wage, — should not be mistaken.
The median wage is an indicator that splits the total number of jobs into two equal parts: 50% are paid below the figure and 50% are paid above it. While the average wage is the arithmetical value of the earnings of a certain group of the working population.
The median figure is considered to be more representative than the average wage.
What is the minimum salary in Luxembourg
Luxembourg also has one of the highest minimum wages in Europe: as of February 1, 2023, the minimum wage in Luxembourg is 2,447 euros for unskilled workers and 2,936.48 euros for skilled workers.
In April 2023 another indexation of salaries is expected. This means that the minimum wage in Luxembourg will increase again.
According to the General Inspectorate of Social Security (IGSS), some 67,000 people are currently receiving a minimal wage, in other words, the Luxembourg minimum salary. In general, there are 16% more men receiving minimum wage, than women.
Likewise, there are two major groups of employees who receive the minimum wage in Luxembourg:
- The unskilled workers between 20-24 years old
This group accounts for 20% of all workers receiving the minimum wage in Luxembourg. The reason for this is the lack of experience and because at this age, typically, it's just the beginning of one's career.
- Skilled workers between the ages of 25-29 years old
There are 17% of minimum wage workers of this type in the Grand Duchy. This figure may seem more worrisome than the previous one, due to the overall economic recession.
For teenagers, the government has set the following minimum salary rates
Salary is calculated by age:
- The 15 to 17-year-olds have the lowest minimum wage in Luxembourg: 1,835.30 per month.
- For teenagers from 17 to 18 years old, the payment is slightly higher, at 1,957.65 euros per month.
- After reaching the age of 18, now adults can qualify for a minimum of 2,447.07 euros per month.
With a standard 40-hour work week, the minimum hourly salary in Luxembourg can be calculated approximately as follows:
| For qualified employees | 18,35 euro/hour |
|---|---|
| For unqualified employees | 14,4 euro/hour |
| For adults | 14,4 euro/hour |
| For teenagers 17-18 years old | 11,32 euro/hour |
| For teenagers 15-17 years old | 0,61 euros/hour |
What affects the amount of salary in Luxembourg
It should be mentioned that salaries can vary greatly depending on:
- Industry
Workers in the IT, financial, insurance, education, and healthcare sectors tend to earn higher wages than those in other industries.
- Profession
An elementary school teacher in Luxembourg earns about 68,000 euros per year. A secondary school teacher in the first year of work receives 77,000 euros on average.
- Qualification and experience
Skilled elementary school teachers earn about 100,000 euros annually. But this requires 15 years of experience and training. Well-qualified specialists earn more than unskilled workers in almost any industry.
- Age
Teenagers are paid at different rates than adult employees.
The employee's sex and type of contract are supposed to not affect the wage at all:
- In Luxembourg, gender equality is established by law, i.e. employers are obliged to pay the same wage in Luxembourg, regardless of the employee's sex.
- Fixed-term workers are also entitled to the same salary as those with a permanent contract.
There are also three factors that determine the labor market in Luxembourg:
- The ambition to become the Silicon Valley of Europe
This explains the great attention to the IT sector and the high salaries of those in it, as well as the comprehensive support for innovative start-ups, which are also closely linked to IT.
- Fintech emphasis
Luxembourg's financial services sector is leading in the country: it generates up to 26% of GDP. Nearly every third of Luxembourg employees work either directly in the financial sector or in a related industry. That's why banking professionals and experts in insurance, consulting, auditing, and legal services are constantly in demand and well-remunerated in this sector.
- Cross-border workers
These are employees who live in neighboring countries, but come to work in Luxembourg. They create a special outline of the labor market because they want to make sure that the time spent on travel is not in vain and that this inconvenience would be compensated with the level of salaries in Luxembourg.
What are the qualified workers' salaries
As mentioned before, high-skilled workers in Luxembourg tend to receive better salaries. To give you an example, let's take a look at a few specialties and their average salaries for skilled workers.
IT specialists
At the top of the list of in-demand professions. The amount of salary depends strongly on the profile of the IT specialist, his experience, and the stack the worker has. The normal average salary is considered to be 5000-7000 euros per month. However, it all depends on the particular vacancy.
Doctors
A needed and well-paid profession in Luxembourg. According to Payscale, the average salary of a general practitioner in Luxembourg is about 120,000 euros per year. The amount can vary depending on the specialty, with some physicians earning considerably more. A demanded and well-paid profession in Luxembourg.
Teachers
This is a highly paid profession in the Grand Duchy. Luxembourg ranks first in the educational field salaries among the OECD countries. As we wrote earlier, an elementary school teacher with no experience can claim a salary of 68,000 euros per year. And if the experience is 15 years or more, the salary will start at 100,000. If the teacher works with older children and middle school, even without experience, he or she can expect an average salary of 77,000 euros. Secondary school teachers with 15 years of experience can expect to earn more than 107,000 euros annually. However, it should be taken into account that it is really difficult to get a job as a teacher in Luxembourg.
Public sector employees
The government is actively looking for qualified professionals in education, police, tax authorities, and digitalization departments. Luxembourg created 2306 jobs in public services in 2022, with another 1393 positions planned for 2023. Moreover, the average salary of Luxembourg civil servants is very attractive — 8688 euros per month, which is just over 104 000 per year.
However, to be working in the public sector it is necessary to have a good knowledge of the three state languages. Although there are positions available for foreigners, the competition is very high, as well as the requirements for applicants.
Blue Card specialists
These can be professionals in any field, that have a profile education and who came to Luxembourg under the labor contract. One of the Blue Card necessary requirements — is a minimum salary of 1.5 times that of the market average for a particular role.
What are the unqualified workers' salaries
According to IGSS, the lowest-paying areas where mostly unskilled workers are employed are:
- Automobiles trading and repair;
- Hospitality sector – hotels, restaurants, and catering;
- Human health and social action;
- Construction sector;
- Transport and warehousing.
At the same time, the HORECA and construction sectors are constantly in need of employees; the demand for labor in other areas is not going down either.
For example, let's take a look at several professions and their average salaries for unskilled specialists.
Sales associates
According to Payscale, the average salary of a Retail Sales Associate in Luxembourg is about 30,000 euros a year. This is significantly lower than the salaries of skilled workers.
Janitors
According to Glassdoor, the average cleaner in Luxembourg earns about 20,000 euros a year. It is one of the lowest wages in the Grand Duchy.
Waiters
According to Payscale, the average waiter's salary in Luxembourg is about 30,000 euros per year. This is another job with rather low salaries, although the profession itself is in high demand.
Who and how regulates salaries in Luxembourg
In Luxembourg, salaries are regulated by the government by means of laws, collective agreements, the Ministry of Labor, and the employers themselves.
- Government
The government sets the minimum salary for skilled and unskilled workers through law. Likewise, the state regulates the wage by means of taxes and social security contributions. In Luxembourg, both employees and employers contribute to the social security system, covering medical care, pension contributions, and other benefits. Luxembourg's tax system is a progressive one, meaning that those with higher incomes pay a higher percentage of their income in taxes.
- Collective agreements
In industries where regular work overtime happens and non-standard working conditions apply, collective agreements play the role of regulator. Such collective bargaining agreements, usually put together by the trade union, employers, and employees of a specific given sector, are created to establish working conditions, social support measures, vacation time, and many other details. Collective agreements set minimum salaries in Luxembourg — the minimal amount of payment for the job, which can not be lower that the minimum wage set by the state.
- Ministry of Labor
All extra working hours must be paid: like in many other countries, working hours in Luxembourg are limited to 40 hours per week. This rule applies to all employees without exception but still often excludes directors, managers, or self-employed people. If an employee is required to work at weekends, a permit from the Ministry of Labor must be obtained to do so. Weekend work is paid at double the normal wage and is only possible with the employee's consent.
- Employer
Depending on the employer's choice, employees may be given a 13th salary or year-end bonus.
Frequently Asked Questions (FAQ)
How much money can I make in Luxembourg
The Grand Duchy is a country with practically no income limit. It has one of the highest incomes in the entire European Union. The amount of monthly payments depends on the industry, qualifications and age of the employee.
Who has the best chance to find a job in Luxembourg
Luxembourg is very much in need of IT specialists and fintech specialists. However, remember that it is not that easy for third-world country nationals to get a job in these areas. On the other hand, the Grand Duchy actively attracts employees with Blue Card.
Is there paid overtime in Luxembourg
Yes, all overworking hours are supposed to be covered by the employer. Moreover, on weekends it is paid double. This process is regulated directly by the Ministry of Labor, so no employer can force you to work on the weekends. Overworking requires written permission from the Ministry and the employee's consent.
