Key facts
- Overtime: 1.5 hours off per hour, or payment at 140% of the hourly wage (monthly salary ÷ 173) if time off is impossible (Art. L.211-27).
- Sundays and public holidays: a 70% premium on Sundays, except in hotels, restaurants, agriculture and wine-growing; public holiday worked: a 100% premium on top of the day's pay.
- Unskilled SSM: €2,703.74 on 1 January 2026, then €2,771.33 since the index-linked increase of 1 June 2026 (skilled: €3,325.59).
- Pension: contribution of 8.5% paid by the employee and 8.5% paid by the employer since 1 January 2026.
- Exemption: overtime is tax-free; only its 100% portion bears the healthcare and long-term care contributions.
- Every month: salary paid by the last day of the month, detailed pay statement, exact hours reported to the Joint Social Security Centre (CCSS).
How is overtime calculated and paid in Luxembourg?
Overtime is first compensated with time off: 1.5 hours of paid rest per hour, or the same rate credited to a time savings account. Only if time off is impossible, for organisational reasons or because the employee is leaving, is it paid at 140% of the hourly wage, obtained by dividing the monthly salary by 173 (Art. L.211-27 of the Labour Code). With a reference period, compensation takes place during the following period.
- Prior request: except in emergencies (accident, force majeure), any overtime requires a reasoned request to the Labour and Mines Inspectorate (Inspection du travail et des mines, ITM), with the opinion of the staff delegation or, failing that, of the employees concerned; a favourable opinion counts as authorisation, otherwise the Minister of Labour decides (Art. L.211-23 and L.211-24).
- No flat rate: a monthly salary cannot include overtime in advance, except for a senior executive within the meaning of Art. L.211-27, who is excluded from this regime.
- Notice period with exemption from work: time off in lieu requires the employee's agreement.
- Part-time: hours worked beyond the limits of the contract are overtime; they require the employee's agreement, may not exceed full-time hours and carry the statutory premiums (Art. L.123-1 and L.123-5).
Worked example
Monthly salary of €4,000, 40 hours a week: hourly rate of 4,000 ÷ 173 = €23.1214. The employee worked 6 hours of overtime that the organisation of work does not allow to be taken as time off.
| Item | Calculation | Amount |
|---|---|---|
| Base pay for the hours (100%) | 6 × €23.1214 | €138.73 |
| Premium (40%) | 6 × €23.1214 × 40% | €55.49 |
| Total paid (140%) | 6 × €23.1214 × 140% | €194.22 |
The €138.73 base is reported to the Joint Social Security Centre (Centre commun de la sécurité sociale, CCSS) under a separate heading; the €55.49 premium is not reported. Illustrative calculation based on the articles cited: a collective agreement may provide more.
Sundays, public holidays, nights: which premiums apply in Luxembourg?
As a rule, Sunday work carries a 70% premium and work on a public holiday 100%; night work only carries one under a collective agreement or in hotels and restaurants (Horeca).
| Situation | What is due | Article |
|---|---|---|
| Sunday work | 70% premium per hour; compensatory rest of a full day beyond 4 hours, half a day otherwise. If the hours are compensated by paid time off during the week, only the 70% premium is due. Special rules for Horeca, agriculture and wine-growing: see below the table. | L.231-7 |
| Public holiday not worked, on a normal working day | pay for the hours that would have been worked | L.232-6 |
| Public holiday worked | hours worked paid with a 100% premium, on top of the normal day's pay, i.e. 300% in total for a monthly-paid employee | L.232-7 |
| Public holiday falling on a Sunday and worked | 100% and 70% premiums combined | L.232-7 |
| Night | at least 15% where a collective agreement applies; Horeca: 25% per hour between 1 am and 6 am, as time off or money; otherwise no statutory premium | L.162-12, L.212-8 |
Overtime worked on a public holiday combines the premiums. In Horeca, agriculture and wine-growing, Sunday work does not carry the 70% premium: an employee who totals at least 20 Sundays in the year gets 2 extra days of paid leave instead (Art. L.231-7). In Horeca and other seasonal businesses, a Grand-Ducal Regulation of 8 October 1976 also allows each public holiday worked to be compensated with 2 days of paid rest or leave instead of the 100% premium, the normal day's pay remaining due (ITM).
Worked example (same employee, hourly rate of €23.1214)
- 4 hours on a Sunday, compensated by half a day off during the week: only the 70% premium is due, i.e. 4 × €23.1214 × 70% = €64.74.
- 8 hours on Tuesday 23 June 2026, National Day, a normal working day: monthly salary unchanged, plus 8 × €23.1214 × 200% = €369.94.
Overtime and premiums: what is exempt from tax and social security contributions?
Overtime is exempt from tax and almost entirely from contributions; night, Sunday and public holiday premiums are tax-exempt but remain subject to contributions.
| Item | Income tax | Social security contributions |
|---|---|---|
| Overtime, 100% portion | exempt for private sector employees, except senior executives | only the healthcare and long-term care contributions |
| Overtime, 40% premium | exempt | exempt, both employee and employer shares |
| Night, Sunday and public holiday premiums | exempt up to the rates set by law, a collective agreement or a collective contract | due |
The tax exemption requires pay provided for by law, a collective agreement or a collective contract, for work actually performed (Art. 115, No 11 of the Income Tax Act and Grand-Ducal Regulation of 21 December 2007). The part of a premium above those rates is taxable: outside a collective agreement and outside Horeca, a night premium granted at the employer's discretion is not covered by the exemption. For tax purposes, "night work" means regularly working at least 7 consecutive hours, including at least 3 hours between 10 pm and 6 am.
The payroll account shows exempt amounts in separate columns (Art. 6 of the Grand-Ducal Regulation of 21 December 2007).
2026 minimum wage and index-linked increase: what are the amounts?
A 2.5% index-linked increase (tranche indiciaire) applied on 1 June 2026: on that date the employer had to raise all salaries by 2.5%, not only those paid at the SSM (Art. L.223-1).
| Item | On 1 January 2026 (index 968.04) | Since 1 June 2026 (index 992.24) |
|---|---|---|
| Unskilled SSM | €2,703.74 | €2,771.33 |
| Unskilled SSM, hourly rate | €15.6285 | €16.0192 |
| Skilled SSM (120%) | €3,244.48 | €3,325.59 |
| Aged 17 to 18 (80%) | €2,162.99 | €2,217.06 |
| Aged 15 to 17 (75%) | €2,027.80 | €2,078.49 |
The hourly rate is the monthly rate divided by 173 (Art. L.222-9). According to the National Institute of Statistics and Economic Studies (STATEC), the next increase will be triggered when the six-month average of the index reaches 1,064.75; it had not been triggered on 5 October 2026.
Together with income tax withholding, the employer also pays the minimum wage tax credit (crédit d'impôt salaire social minimum, CISSM): €81 a month for a gross monthly salary, actual or converted to full time, of €1,800 to €3,000, then a decreasing amount up to €3,600 (Art. 139quater of the Income Tax Act).
What are the 2026 social security contribution rates in Luxembourg?
Since 1 January 2026, the pension contribution has been 8.5% for the employee and for the employer alike; with the State's share, the overall rate is 25.5%, set for 2026 to 2032 by the Act of 19 December 2025.
| Contribution | Employee | Employer |
|---|---|---|
| Pension, since 1 January 2026 | 8.50% | 8.50% |
| Sickness, healthcare | 2.80% | 2.80% |
| Sickness, cash benefits | 0.25% | 0.25% |
| Long-term care | 1.40%, after allowance | none |
| Accident | none | 0.65% multiplied by the bonus-malus factor (0.70% in 2025) |
| Occupational health | none | 0.14% |
| Employers' Mutual Insurance Scheme (Mutualité des employeurs, MDE) | none | 0.23% to 2.66% depending on the class |
The monthly contribution ceiling, which does not apply to long-term care insurance, is 5 times the SSM: €13,518.68 on 1 January 2026 and €13,856.63 since 1 June 2026. The long-term care allowance, a quarter of the SSM, rose from €675.93 to €692.83 on the same date. The MDE classes are explained on the Sick leave page.
New from 1 January 2026: the progressive pension. An employee who meets the conditions for early old-age pension and has held a post of at least 75% of full time for at least 3 years may ask, at least 4 months in advance, to reduce working time by at least 25%; the employer replies within one month and informs the staff delegation of the request, and the reduction is agreed in an amendment to the contract. If the National Pension Insurance Fund (Caisse nationale d'assurance pension, CNAP) admits the employee, the employer pays with the salary a monthly allowance whose amount the CNAP notifies and which it reimburses in full, employer contributions included (Art. L.584-8 to L.584-10 of the Labour Code).
What must be reported to the CCSS each month and given to the employee?
Each month, the employer pays the salary by the last day of the month, provides a detailed pay statement and reports salaries, hours and incapacity for work to the CCSS.
The pay statement
With the last payment of the month, the employer provides an exact and detailed statement: period worked, total number of hours corresponding to the salary paid, rates for the hours worked and any other item in cash or in kind (Art. L.125-7). When the contract ends, the statement and final balance are provided within 5 days. Bonuses and gratuities are paid no later than 2 months after the year of service or the end of the financial year (Art. L.221-1).
The CCSS return
- Base hours: the exact number of hours corresponding to base pay, mandatory since 1 January 2020 (hours paid, leave, public holidays, incapacity paid by the employer), excluding overtime and incapacity paid by the National Health Fund (Caisse nationale de santé, CNS), rounded to the hour (30 minutes or more rounded up).
- Overtime: amount and number of hours without the premium, under a separate heading; the 40% premium is not reported, and hours taken as time off are only reported when settled.
- Incapacity for work: every period, including those where the employer continues to pay the salary (Art. 426 of the Social Security Code).
Returns are filed through SECUline, MyGuichet.lu or a paper list returned within 10 days; each unreported salary can lead to a quarterly administrative fine. The CCSS then sends the account statement before the 15th of the month: the balance is payable within 10 days of issue, failing which interest of 0.6% per full month applies and, after 4 months, enforced recovery.
Keep payroll documents for 10 years (Art. 16 of the Commercial Code, as the Labour and Mines Inspectorate points out). An employee can claim unpaid salary for 3 years (Art. L.221-2). For pay during sick leave and holiday pay, see the Sick leave and Annual leave pages.
Common mistakes
- Flat-rate overtime in the monthly salary: prohibited, except for a genuine senior executive within the meaning of Art. L.211-27.
- Incorrect CCSS returns: reporting the 40% premium, reporting hours taken as time off as overtime, or reporting 173 hours by default instead of the exact hours.
- Premiums not combined: a public holiday falling on a Sunday and worked combines 100% and 70%, and overtime on a public holiday combines the premiums.
- Old pay scale after 1 June 2026: the index-linked increase applies to all salaries, not only to the SSM.
- Night premium exempted without a basis: outside a collective agreement and outside Horeca, a discretionary night premium is not covered by the tax exemption.
- Forgotten compensatory days for public holidays: in 2026, 9 May, 15 August, 1 November and 26 December fall at a weekend, i.e. 4 days to grant to an employee who works Monday to Friday.
Your checklist
- Close the register hours each month and classify them: normal, overtime, Sunday, public holiday, night.
- Choose and document how overtime is compensated: 1.5 hours off, time savings account, or payment at 140% if time off is impossible.
- Apply the 1 June 2026 index-linked increase to all salaries and check each minimum wage against qualification and age.
- Set up the 2026 rates: pension at 8.5% since 1 January, MDE class and rate, accident bonus-malus factor.
- Show exempt amounts in separate columns of the payroll account.
- Pay the salary by the last day of the month and provide a detailed pay statement.
- Report exact hours, overtime without premium and incapacity periods to the CCSS, then pay the account statement within 10 days.
- Keep payroll documents for 10 years.
How Luxapps helps
FXP connects accounting firms (fiduciaires) and their employer clients to the payroll engine; MySafeBox serves businesses that run payroll in-house. Recorded hours are exported to payroll, and approved absences feed the month's variables without re-keying.
Real-time clocking in on the web and mobile; overtime and variances calculated, then exported to payroll.
FXP and MySafeBoxMonthly grid entered by the employer (clock-ins, variances, overtime, bonuses, expense claims, benefits in kind), checked and approved by the accounting firm or payroll department, closed and then sent to the payroll engine, with end-to-end traceability.
FXPNative connector for Apsal and Proximus NXT, Payroll Engine, and any other engine via API: variables go up, payslips come back down.
FXPApproved absences (leave, remote work, sickness) feed the month's payroll variables.
FXP and MySafeBoxPayslips encrypted with AES-256 in the HR digital safe, targeted distribution with acknowledgement of receipt, 10-year archiving built in.
MySafeBoxFrequently asked questions
First by paid time off of 1.5 hours per hour of overtime, or credited to a time savings account at the same rate. If time off is impossible, for organisational reasons or because the employee is leaving, the hour is paid at 140% of the hourly wage, i.e. the monthly salary divided by 173 (Art. L.211-27 of the Labour Code). This payment is tax-exempt for private sector employees, except senior executives.
For an unskilled employee aged 18 or over, the social minimum wage has been €2,771.33 gross a month since 1 June 2026, compared with €2,703.74 from 1 January to 31 May 2026, i.e. €16.0192 an hour. The skilled minimum wage, 20% higher, is €3,325.59. Employees under 18 are entitled to 80% or 75% of the minimum wage depending on their age.
As a rule, each hour worked on a Sunday carries a 70% premium, with compensatory rest of a full day beyond 4 hours and half a day otherwise (Art. L.231-7); in hotels, restaurants, agriculture and wine-growing, the premium is replaced by 2 extra days of leave once 20 Sundays have been worked in the year. On a public holiday worked, the hours worked are paid with a 100% premium on top of the normal day's pay, i.e. 300% in total for a monthly-paid employee. A public holiday falling on a Sunday and worked combines both premiums.
Since 1 January 2026, the pension contribution has been 8.5% for the employee and 8.5% for the employer. On top of this come 2.8% each for healthcare, 0.25% each for cash benefits and 1.4% long-term care for the employee, then, for the employer alone, 0.65% accident multiplied by the bonus-malus factor, 0.14% occupational health and 0.23% to 2.66% for the Employers' Mutual Insurance Scheme. The contribution ceiling, which does not apply to long-term care, has been €13,856.63 a month since 1 June 2026.
For each employee, the employer reports contributory pay, the exact number of hours corresponding to base pay, the amount and number of overtime hours without premium, and periods of incapacity for work, including those it pays itself. The 40% premium is not reported, and hours taken as time off are only reported when settled. Returns are filed through SECUline, MyGuichet.lu or a paper list returned within 10 days.
At the end of each month, the employer provides an exact and detailed statement: period worked, total number of hours corresponding to the salary paid, rates for the hours worked and any other item in cash or in kind (Art. L.125-7 of the Labour Code). In the payroll account kept by the employer, tax-exempt amounts, such as overtime and night, Sunday and public holiday premiums, appear in separate columns. When the contract ends, the statement and final balance are provided within 5 days.
Official sources
- Labour Code, consolidated version of 26 July 2026 (Legilux, in French)
- Grand-Ducal Regulation of 21 December 2007 on the exemption of overtime and premiums (Legilux, in French)
- Income Tax Act, coordinated text as at 1 January 2026 (Direct Tax Administration, in French)
- Act of 19 December 2025 adapting the pension schemes (Legilux, in French)
- CCSS, social parameters and contribution rates (in French)
- CCSS, reporting pay: hours and overtime (in French)
- General Inspectorate of Social Security (IGSS), social parameters on 1 January 2026 (in French)
- General Inspectorate of Social Security (IGSS), social parameters on 1 June 2026 (in French)
- STATEC, August 2026 consumer price index and the next indexation threshold (in French)
- Guichet.lu, overtime (in French)
This guide sets out the general rules in force on 5 October 2026. It is not legal advice for your situation (collective agreement, sector, employee status).