Employer of Record in Luxembourg (EOR Luxembourg)
Last updated
- Capital City
- Luxembourg City
- Languages
- Luxembourgish, French, German
- Currency
- Euro (EUR)
- Population Size
- Approximately 645,000
- Employer Taxes
- 12-15%
- Employee Costs
- 12-13%
- Payroll Frequency
- Monthly
Hire Globally, Pay Locally, Expand Effortlessly
An Employer of Record (EOR) provides an efficient pathway for hiring and managing employees overseas without establishing a local branch. INS Global’s EOR service in Luxembourg offers companies a rapid, secure solution for international talent acquisition.
As a third-party organization, our EOR handles complex employer responsibilities, enabling businesses to streamline global mobility in just 48 hours. Companies can now navigate overseas hiring and employee management with unprecedented ease and cost-effectiveness.
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What Does a EOR Provide Over Company Incorporation in Luxembourg?
Incorporating a new company overseas can be burdensome and costly. If you are unfamiliar with labor regulations in your target market, you could face expensive fines and penalties for the slightest errors in HR.
A EOR:
- Allows you to expand confidently without fear of costly fees
- Provides expert advice and guidance on local labor benchmarks and best practices
- Increases market entry time
- Decreases the cost of administrative overheads and expenses in Luxembourg
PEO/EOR Vs Company Incorporation
The Advantage in Figures
| PEO/EOR | Company Incorporation | |
|---|---|---|
| Price | 80% Less Expensive | |
| Market Entry | 2-5 Days | 6 Months |
| Employee Turnover | Decrease by 14% | |
| Recommendation | 98% of the Current PEO Clients | |
| Administrative Fees | Saves an Average of $450 | |
| Costly Payroll and Compliance Fines | Help Avoid | |
| Company Growth Rate | 7 – 9% | |
| ROI | 27% | |
| Closed During Pandemic | -58% | |
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What are the Advantages of Using a EOR as your Local Partner in Luxembourg?
Expert Guidance on All Legal Matters
EOR provide specialist knowledge of relevant labor regulations to assure you of total compliance
Get Started in a Fraction of the Time
A EOR can allow you to begin operations in a new country in a matter of days, which is ahead of the months it can take to establish a new entity via company incorporation
Simplify Your Setup Process
EOR allow you to operate in a way that gives you greater flexibility in the way you hire and provide for your employees
Reduced Spending on Costly Local Necessities
Save on salary, benefits, and other costs like office space in Luxembourg
Enjoy All the Services You Need Through One Point of Contact
A EOR gives you the operational capabilities of an entire team or department for a single monthly fee, with no additional management time requirements.
The Steps Required to Begin Working with a EOR in Luxembourg
We provide a simple setup process to get you started in Luxembourg as quickly as possible.
- 1
We meet to discuss your needs and form an agreement that suits you.
- 2
Our EOR in Luxembourg provides you with a way to quickly and securely transfer or hire employees to the country.
- 3
We take care of all necessary HR services for you and your employees.
- 4
You and your staff continue operations as normal.
INS GUIDES
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Learn how the Labor Law Guide is applied in all aspects and situations, from an employer and employee perspective.
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Labor Law in Luxembourg
Employment Contracts in Luxembourg
Most contracts in Luxembourg are for indefinite periods and must be made in writing. Fixed-Term contracts may be made for specific short-term periods.
There is a guaranteed minimum wage in Luxembourg, based on age and worker type.
Regular working hours are 8 hours per day and 40 hours per week. Any amounts above this must be established in writing with a specific reason given and can only be for a short time.
Maximum working hours, including overtime, must not exceed 10 hours per day or 48 hours per week. These overtime hours are to be paid at 140% of the standard salary.
Types Of Leave
There are 11 days of public holiday per year in Luxembourg. Employers must allow workers a day off on these holidays or pay 200% of their standard salary. The legal minimum amount of annual leave a worker is entitled to in Luxembourg is 25 days.
Workers in Luxembourg must provide employers with a medical incapacity certificate by the third day if they want to take sick leave and are protected against dismissal for 26 weeks.
Employers are obliged to pay employees on sick leave until the end of the month in which the 77th day of sick leave occurred. After which time, the employee is eligible to receive an allowance based on social security contributions.
Female employees are eligible for maternity leave that begins 8 weeks before the due date of a child and lasts a maximum of 20 weeks (with additional leave for late births). During this time, employees may receive an allowance based on their standard salary but limited to 5X minimum wage.
Male employees are eligible for 10 days of paid paternity leave upon the birth of a child. Parents in Luxembourg may choose to take 4-20 (depending on whether that leave is full-time, part-time, or split between parents) months of parental leave until a child is 6 years old.
Tax Law
Income tax in Luxembourg is leveled progressively from 0-42%. The amount also depends on the marital and residency status of the employee. Employers should expect to contribute to their employee’s social security an amount between 12.15-15.2% of their salary. Employee contributions are between 12.2-12.45%.
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Frequently Asked Questions
Global Employer of Record is an effective solution for companies looking to expand their workforce abroad effortlessly.
This approach allows you to outsource the international hiring process quickly and efficiently, providing access to a global talent pool while still managing payroll compliance in each country.
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