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Luxembourg: Pay and benefits

Updating author: Patrick Ries, Loyens & Loeff Luxembourg

Original author: Arendt & Medernach

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  • Employees' remuneration is automatically increased in line with inflation, under a statutory system of pay indexation. (See General)
  • Employees must be paid monthly and given a detailed payslip. (See Payment of wages)
  • Various rules govern the type and amount of deductions that may be made from an employee's pay. (See Deductions)
  • Employers are required to ensure equal remuneration for women and men for equal work or work of equal value, and pay discrimination is prohibited on various other grounds. (See Equal pay)
  • A statutory national minimum wage applies to all employees, with separate rates for skilled and unskilled adult employees, and for under-18s. (See Minimum wage)
  • All private-sector employees are mandatorily covered by the state pension scheme, which forms part of the social security system. (See Pensions)
  • Employers must withhold employees' income tax at source, and employers and employees must pay statutory social security contributions. (See Income tax and social security)
  • The remuneration that is taken into account to calculate sickness absence pay is different depending on whether or not employees receive their work schedule before the start of the period of sickness absence. A statutory insurance scheme refunds 80% of the employer's sick pay costs. (See Pay for employees not at work)