What Is A Good Salary in Luxembourg? [2023] | Russianvagabond (2024)

Luxembourg is a popular destination for people from neighboring countries and beyond, thanks to its booming economy, numerous multinational companies, and high wages. Beyond these attractive things, it’s essential to know the local salaries before accepting or seeking a job in the Grand Duchy.

An average gross monthly salary of €5,500 is considered to be good in Luxembourg. This corresponds to an annual gross salary of above €66,000 per year, making Luxembourg one of the countries with the highest wages in the Eurozone. With this salary, you can live a comfortable and decent life in Luxembourg, including renting an apartment and occasionally eating out.

What salary should you expect in Luxembourg? Set your income goals high; Luxembourg provides some of the highest salaries in the region. In this article, we discuss the ranges of a good salary in Luxembourg, the minimum and average, best-paying jobs, and look into the working conditions in the country.

What is a good salary in Luxembourg in 2023?

Luxembourg is known for exceptionally high salaries, but the cost of living isn’t as cheap as in neighboring countries. In Luxembourg, a good salary before tax ranges between €5,000 and €6,000 per month and up to €30 per hour, the highest-paid rate globally.

Ultimately, anyone getting between around €66,000 per year in Luxembourg is a good earner.

Luxembourg’s average salaries are the highest in the EU, making someone with an average wage a good earner. Consequently, residents have the highest purchasing power in the EU at about €30,499, while it’s only €22,239 in Germany and €19,537 in France.

Example of a good salary in Luxembourg

Luxembourg’s gross income of €60,000 is decent and above the average. It translates to a net salary of about €3,226 per month.

For a single person, this income is high, and if you have a family to support, this salary is enough but not optimal as you may not afford several things. To be more extravagant with spending, you would be spending all your money, but with a modest lifestyle, you can easily save €500 per month.

According to the latestStatistics, a couple with two children requires an average net income of at least €4,213 (+3.3%). A couple without children needs €2,912 (+7.6%), and a single person needs €2,110 (+6.1%) to live in Luxembourg.

Gross vs net

Gross pay is the theoretical salary during wage negotiations before deducting various social security contributions and taxes. The charges deducted from the negotiated gross wage in Luxembourg are:

• Social security contributions

These are the social security contributions paid to theCCSS, which cover health insurance, unemployment insurance, and old-age pension.

They vary according to the instructions issued annually by the Ministry of Finance, and they amount to approximately 12.5% of an employee’s gross salary.

• Income tax

In Luxembourg, your employer deducts tax at the source based on the tax card sent annually by the administration following the taxpayer’s declarations.

Current income tax rates are (2022-2023):

For example, on a salary of about €60,000 before tax, the following deductions will be made:

• Income tax: € 13,916
• Health care: €1,830
• Pension: €4,800
• Dependency insurance: €748

This results in a total tax of €21,294, which leaves you a net income of €38,706 per year or €3,226 per month.

However, these are general numbers. Your after-tax income will depend on your marital status, where 60,000 will result in:

• €3,516 for a single without children
• €4,085 for married
• €3,579 for divorced with children

Bonuses, holiday pay, and remuneration packages

Luxembourg’s working hours are limited to 8 hours a day and 40 hours a week; after this, employees receive an overtime salary. Generally, the maximum overtime limit is 2 hours per day and 8 hours per week and must be at 150% of the regular salary rate.

Working on Sunday is prohibited unless under certain circ*mstances, which must be permitted by the government.

In Luxembourg, it’s common to pay the 13th salary, which is the equivalent of one months’ compensation, and you receive it at the end of the year.

Employees receive a minimum of 26 working days of paid leave per year. Certain employees automatically receive additional leave to their annual one. They are:

• Disabled persons or those who have suffered a work accident- Additional six days of leave
• Mining employees- Additional three days of leave
• An employee or apprentice who has not received a continuous rest period of 44 hours per week is entitled to an additional day every eight weeks.

The Luxembourg government has sought to encourage families through tax credits in the form of family benefits. This makes the tax rate for an average married person lower, thanks to child-related benefits and tax provisions.

The benefit enables low-income parents in the country to claim tax relief of up to €922.50 per child.

Salaries in Luxembourg

Officially, an average employee earns about €64,932 per month in the Grand Duchy of Luxembourg. Its average salary is the highest in the EU. This figure changes every two years depending on the cost of living in the country.

However, the majority of people working in Luxembourg earn between €2,900 and €4,850 per month before taxes.

That’s about €34,800 and €58,200 per year. Only 3% of employees make above €9,400 per month or €112,800 annually.

Some facts about work perspectives in Luxembourg include:

• It has more than 135,909 companies
• 12% of total job listings are in English
• The job market is constantly growing since Luxembourg offers tax incentives for the foreign investors
• It has one of the lowest unemployment rates (6.3%) in Europe
• There is increasing demand for highly skilled international workers

Median salaries for some typical jobs in Luxembourg:

The minimum wage in Luxembourg

Luxembourg has the highest minimum wage in the EU. All employers must respect a minimum social wage assessed every two years by the Luxembourg government.

The government determines this minimum wage at two levels: minimum wage for unskilled workers and that for qualified ones.

According to thelabor law in Luxembourg, the minimum wage in 2021 was €2.256 for non-qualified employees over 18 years old. That’s about €15 per hour. Qualified employees are entitled to at least €2.708.

Every worker in Luxembourg is affected by thenational indexation of salaries, where employers adjust the wages they pay depending on the cost of living in the country. For example, if the consumer price index rises or falls by 3.5%, salaries in Luxembourg adjust by this percentage.

Some industries in the Grand Duchy of Luxembourg have non-standard working systems, hence deciding minimum salaries and working conditions based on collective agreements between employers and employees.

An example is a business that operates 24/7. If the industry has an agreement, the minimum salary must not be lower than the national minimum wage.

Minimum salary for the residence and work permit

Everyone with a need for residence and work permit in Luxembourg must meet the requirements for a minimal salary of €2.256. Graduates of universities within Luxembourg and highly educated migrants need a lower income level to receive a residence permit.

If you are a non-EU worker moving to Luxembourg, pay extra attention to your future salary and ensure you meet the following requirements to be granted a work visa:

• Your minimum wage is €2,256 or more per month
• Proof of two years experience if you are a manual laborer
• You have a certification for your profession. For example, a diploma
• If you don’t have a certificate, have ten years of practical experience in a similar field

Average salary in Luxembourg

Average salaries in Luxembourg are high compared to the European average. A full-time employee in Luxembourg earns between €59,000 and €64,932 on average, which is 182% of the European standard.

The median salary for workers between 35 and 44 of age is €5,135 per month, and the median wages for in-demand jobs in Luxembourg are:

• Senior product manager: €87,600
• IT project manager: €68,400
• Legal counsel: €52,730
• Software engineer: €49,850
• Financial analyst: €45,000

In Luxembourg, numerous factors determine how much you will earn. They include:

Industry

Some of the salaries of the typical jobs based on your industry are as shown below.

Gender

Luxembourg has a 5% gender pay gap between men and women in all sectors. Compared to the same field and with the same working hours, a man’s average monthly earning is €5,005 while the monthly average wage of a woman is €4,800.

There are differences in working conditions for men and women. The unemployment rate for women is 10% lower than for men, meaning women are more than twice more likely to be employed than men.

Experience

In Luxembourg, a higher level of experience translates to a higher wage and rank for that individual. A professional with 3 to 6 years’ experience makes 32%–35% more than one with one year or less experience. Once you attain ten years’ working experience, you will receive a 21% salary increase.

Education

In Luxembourg, your level of high education determines how much you earn. As your level of education rises, so does your salary. For example, Ph.D. holders earn 23% more than master’s students, those with master’s earn 29% more than bachelor’s students, and diploma holders make 24% less compared to those with a bachelor’s degree.

Average expenses with an average salary in Luxembourg

Luxembourg isn’t a cheap country to live in, as the cost of living is high in numerous aspects, such as clothing, housing, and food. You can stay in Luxembourg city, but you’d spend much less in the southern cities.

The city ranks 34^thin the world price index. The cost of living in Luxembourg’s capital is lower than in cities like London, Paris, or Geneva but higher than in Madrid or Prague.

With an average salary of €60,000 per year before taxes, you will have about €3,225 net per month. This amount covers all necessary expenses in most places within Luxembourg.

Housing

In Luxembourg, housing represents a significant part of a household budget. You require a minimum of €1,916 per month to accommodate a family of four, €1,495 for a couple without children, and €1,203 for a single person. So as a single, rent will eat up more than 1/3 of your income in Luxembourg.

Food

Food is the second-largest source of expenses in Luxembourg, representing up to 25% of the budget. Approximately a family of four can spend about €920 per month on food. A couple will need €565 and at least €271 for a single person.

There are numerous food intake options in the country; you can choose to buy groceries and prepare your meals or eat out. It will cost you €12 to €17 per person to take a quality meal at an average restaurant, about €30 in a nicer place, and €10 in a fast food outlet.

Generally, expect to pay at least €18 when going out for a meal in Luxembourg.

If you choose to prepare your meals as a single person, you will spend €300 per month on groceries, and a family of four will need €700.

Healthcare

The public healthcare system in Luxembourg provides free primary healthcare to all residents. However, all employees pay 2.8% of their monthly gross salary in compulsory contribution to use the medical services.

Moreover, manual workers are at a greater risk of needing medical treatment; hence contribute 10% higher.

These contributions cover residents for consultations, childbirth, rehabilitation, consultations, hospitalization, and medical prescriptions.

Health insurance for expats in Luxembourg

As an expat, you can sign up for private health insurance tailored to expats. The policy price isn’t related to your income, as public insurance in Luxembourg.

It has international coverage and will save you money on healthcare. Cigna is one of the world’s best expat health insurance providers, with 74,000 employees, 200 years of experience, and more than 100 million customers globally.

Visit their website to learn more and choose the optimal coverage for your situation.

Public transport

Luxembourg has an excellent free public transport network consisting of buses and trains. However, you pay €3 for two hours or €6 for a day ticket and €24 for a 2-hour ticket if you travel first class on a train. The monthly ticket is about €38.

Nonetheless, some items and services are cheaper in Luxembourg than in other countries in this region. For example, prices are lower than on average for alcoholic beverages, tobacco, and electronics.

Transportation, including personal cars, fuel, and public transport, is also very affordable in Luxembourg compared to other European countries, ranging from 19% to 33% cheaper on average than in Belgium, France, and Germany.

Highest-paid jobs in Luxembourg

Research by Luxembourg’s statistical officeSTATECshows that employees in the insurance and financial services earn the best salaries, followed by technical professionals, electricity production workers, IT workers, and teachers.

In fact, Luxembourg teachers have the highest income compared to their European colleagues.

Some of the best-paid sectors in Luxembourg include:

• Financial activities and insurance: €99,250
• Education: €98,835
• Professional, scientific and technical activities: €88,721
• Public administration: €86,582

Meanwhile, the lowest-paid jobs in Luxembourg were in the accommodation and food sectors.

The currentOECD’s reportshows that secondary school teacher salaries started at €73,700, putting Luxembourg at the top of the earnings list across major developed countries. Other highest-paying jobs in Luxembourg are:

How much money do you need to live comfortably in Luxembourg?

Compared to other EU countries, living in Luxembourg is costly because essential expenses such as food, groceries, entertainment, and housing are expensive.

However, with a good salary, living in this country is manageable and enjoyable. A comfortable living in Luxembourg requires:

• A family of four will need about€4,677.
• A single person needs about €2,928 per month.

While the cost of living seems to be high, it’s still 47% less than in London.

Housing in Luxembourg:

• two-bedroom apartment in the city center: €2,216
• one-bedroom apartment in the city center: €1,495
• utilities: €208
• internet: €50

With a minimum wage of over €2,000, you will need at least that to live in Luxembourg. A family of four needs at least €4,213, a couple without children will be fine with €2,912, and €2,110 is required for a single to have a basic life. It’s the minimal amount to cover all general living expenses in Luxembourg.

If you want to enjoy life more and put some money aside, you will need a higher net income.

Consequently, a net salary of €3,500 per month is enough to earn a decent life while living in the suburbs and driving a regular car as a single. €6,000 in net income will provide a good standard of living for a couple with kids.

A couple will enjoy life with a salary of €3,935 after tax combined. A double that will provide you a luxurious life in Luxembourg.

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