The Luxembourg Parliament (Chambre des Députés) unanimously adopted[1] Bill 8459 amending the Labor Code on 12 December 2024. It will enter into force on 1st January 2025.
A motion to review the mechanism on a yearly basis has been introduced. The Parliament decided unanimously to discuss this further in the context of a parliamentary working group.
Bill 8459 provides among other things:
- Increase in minimum wage rates:
The minimum wage for unqualified workers will rise by 2.6%, i.e.:
- Monthly salary: From EUR 2,570.93 to EUR 2,637.79;
- Hourly rate: From EUR 14.86 to EUR 15.25
For qualified workers, the minimum wage will also increase:
- Monthly salary: From EUR 3,085.11 to EUR 3,165.35
- Hourly rate: From EUR 17.83 to EUR 18.30
- Tax exemption:
Due to the tax amendment (Bill 8414), as of 1st January 2025 non-qualified minimum social wage workers will not be subject to income tax, irrespective of their tax class. For more information reach out to our Tax team.
- Parallel 2.6% increase in social inclusion income and disability benefits
- The index on 1st January 2025 remains the same as it has been since 1st September 2023, i.e. 944.43.
The impacts on employers:
These changes are of public order and apply to all employers, who will have to comply with them from 1st January 2025.
There are approximately 70,585 employees currently earning the minimum wage and who will be affected by this change.
It means an annual increase in wages due to this adjustment estimated at EUR 56.90 million.
In addition, the rise in employer contributions, due to both the increase in wages and the adjustment of the contribution ceiling, is estimated at EUR 14.77 million.
[1] 1st vote. A request for an exemption of second vote has been introduced.
