Wages

A wage is the compensation an employee receives in exchange for the work performed.

The Labour Code defines a wage as follows: "The employee’s overall payment, including, in addition to the cash payment, any other advantages and ancillary payments, such as in particular bonuses, increments, discounts, premiums, free accommodation and any other items of the same kind."

Overall remuneration thus includes:

• a cash payment; and            
• further advantages or ancillary payments.

In principle, remuneration is freely determined by the employer and its employee.

The employer is however obliged to respect the rate of the minimum social wage (salaire social minimum - SSM) as well as any pay grades outlined in certain collective employment agreements. 

Minimum wage

The minimum social wage applies to all employees (regardless of gender, profession, and for all undertakings) who are employed by an employer in the context of a work contract.

As stipulations relating to the social wage are a matter of public order, this minimum social wage must be paid by all employers who conduct business within the Luxembourg territory.

The rates of the minimum social wage are determined depending on the beneficiaries' age and qualifications.

Luxembourg law guarantees all employees a minimum social wage the levels of which are set as follows as of 1 septembre 2023 (index 944,43):