There are plenty of reasons people move to Luxembourg. The city offers foreigners and ex-pats an amazing historical, cultural, and linguistic experience.
The country is also safe and clean, with a high quality of life thanks to its booming economy. Beyond all these goodies, it’s important to establish what the local salaries look like before booking your flight.
What is a good salary in Luxembourg?
A good income in Luxembourg is approximately $5,832 per month. This translates to an annual salary of $69,000, making Luxembourg a European country with one of the highest salaries. This salary can cater to all one’s basic needs and afford a decent life in the country.
In this article, I’ll discuss a good salary in Luxembourg and how much you can earn on average. I’ll also talk about the country’s best-paying jobs, so keep reading.
What is a good salary in Luxembourg?
A good salary to provide you a comfortable life in Luxembourg ranges between $5,300 and $ 6,361 per month. Ultimately if you earn $69,000 annually in Luxembourg, you’re a good earner.
The country boasts the highest average salaries in the EU. This also increases the purchasing power for Luxembourg residents to about $32,335, while that of France and Germany ranges between $20,700 and $23,800.
The above-mentioned monthly salary is high for a single person and enough for a family of four. If you are not so extravagant in your spending, you can save at least $530 per month.
Salary distribution in Luxembourg
Salaries in Luxembourg range between $18,000 and $150,000 per month, the latter being the highest range in most European countries. The amount you earn depends on your experience, company, and location.
Most people working in Luxembourg make between $3,075 and $5,142 per month without tax. That’s around $36,900 and $61,704 per year.
Let’s look at the median salaries for some common jobs in Luxembourg:
| Job title | Median salary |
|---|---|
| Dentist | $111,346 |
| Physician | $145,900 |
| Teacher | $76,100 |
| Sales manager | $60,567 |
| Civil engineer | $58,800 |
| Finance manager | $56,403 |
| Project manager | $48,792 |
| Pharmacist | $44,547 |
| Receptionist | $26,628 |
| Cashier | $18,313 |
| Fashion designer | $27,782 |
What is the minimum salary in Luxembourg?
As mentioned above, Luxembourg boasts the best salaries in Europe. All employers must adhere to the minimum social salary set by the government.
Minimum wages in Luxembourg are broken into two:
- Minimum salary for qualified employees
- Unskilled ones
The labor law in Luxembourg states that the minimum salary for unskilled employees above 18 years old is $16 per hour.
Most employers in Luxembourg adjust salaries based on the country’s cost of living, which affects employees.
For instance, if the consumer price index increases or decreases by four percent, wages in Luxembourg adjust by the same percentage.
Also, some companies in the country have poor working systems, so minimum wages are decided based on collective agreements between employees and employers and their working conditions.
Here are some facts about the work view in Luxembourg:
- 12.5 percent of all job listings are in English
- Luxembourg boasts over 135,900 companies
- The job market in the country constantly grows thanks to the tax incentives that foreign investors enjoy
- Luxembourg has the lowest rate of unemployment in Europe at six percent
- Skilled international workers are in high demand in Luxembourg
- Services and finance are the main leaders in the job market
The average salaries in Luxembourg
Luxembourg has high average salaries compared to other European countries. For instance, an average full-time employee makes between $62,582 and $68,880 a year. This salary is 182 percent above European standards.
Workers between the ages of 35 and 44 earn an average salary of $5,443 per month. Those 50 and older may make more due to experience.
Here are salary averages in Luxembourg by sector:
| Sector | Average salary (per month) |
|---|---|
| Engineering | $3,284 to $6,674 |
| Agriculture | $2,118 to $5,296 |
| Commerce and banking | $3,600 to $8,474 |
| Primary and secondary school teachers | $2,225 to $6,781 |
| Medicine | $3,179 to $9,326 |
| Insurance | $3,073 to $7,100 |
| Commerce and banking | $3,600 to $8,787 |
| Journalism and broadcasting | $2,546 to $6,047 |
Which factors determine salaries in Luxembourg?
Several factors determine the salary structure of employees in Luxembourg. Here is an overview.
1. Experience
As mentioned, workers with higher levels of experience earn more in Luxembourg. The more experienced you are, the more your salary increases.
For instance, a professional boasting more than six years of experience makes over 34 percent more than a worker with a year or less experience.
Those with more than 10 years of experience enjoy a salary increase of at least 21 percent.
2. Gender
There is a 5.5-percent gender pay gap in Luxembourg between males and females in all industries. A man will earn $5,308 per month, while a woman in the same field and working the same hours makes $5,083.
The terms of employment and working conditions for men and women also differ. However, men’s unemployment rate is higher than women’s by 10 percent.
This means men are less likely to be employed than women. The leading industries in the gender pay gap in Luxembourg include healthcare, finance and insurance, construction, and manufacturing.
3. Cost of living
The cost of living in Luxembourg is another factor affecting salaries. If the cost of living index rises or falls, salaries will vary similarly.
Although it’s difficult to ascertain an increase in productivity and cost of living, employees and employers must agree on handling the variances.
4. Education
Your level of education determines how much you earn in Luxembourg. Your salary will increase as your level of education does.
For instance, a master’s holder earns 29.5 percent more than a bachelor’s student, while a Ph.D. holder makes 22.5 percent more money than a master’s student.
Also, if you’re more educated, you will experience less unemployment in Luxembourg and work in more prestigious positions than your less educated counterparts.
5. Government legislation
The laws passed by the government of Luxembourg also play a significant role in determining employee salaries.
The salary rate for workers under 18 years should be 80 percent of the general minimum salary of those above 18 years.
No employers in the country are therefore allowed to pay below what the government has prescribed for different categories of workers.
They must adhere to the laws on hours of work, minimum salaries, equal pay for equal work, and payment of allowances and other benefits.
What are the average expenses with a good salary in Luxembourg?
Life in Luxembourg is expensive, especially in aspects like housing, food, and clothing. This is more so for those living in the city.
That said, the cost of living in the country’s capital is lower than in cities like Paris, London, and Geneva but higher than in Prague or Madrid.
With a salary of $69,000 per year, you will earn $5,832 monthly. This amount will cater to all the basic expenses in most cities in Luxembourg. Here is a breakdown of the expenses.
Housing
Housing in Luxembourg takes up a significant part of household expenses.
A single person will need at least $1,273 a month for a one-bedroom house, while a family of four will require $2,034 a month for a two-bedroom house.
These rental costs are for people living in the city center of Luxembourg.
However, houses are more affordable in the East and South of Luxembourg. If you want to save money, you could settle in a neighboring country and commute to Luxembourg.
Food
Food is the second largest expense in Luxembourg, taking up to 25 percent of a household’s budget.
A single person can spend up to $285 a month on food, while a family of four spends $970 per month. These costs may be higher if you eat out rather than buy groceries and cook for yourself.
If eating out is your preference, a quality meal will cost between $13 to $18 per person at an average restaurant and at least $32 in a classic place. Fast food outlets are cheaper and may cost you $10.
However, the cost of food in Luxembourg depends on where you shop. Locally-owned stores are more expensive than foreign stores.
Transport
Public transport in Luxembourg is excellent, including buses, trains, and taxis. The most amazing thing about public transport here is that it’s free for everyone unless you want to use a first-class ticket.
The tickets cost between $3 for two hours and $6 for a day. Alternatively, you can purchase 10 tickets for two hours at $25.
The taxi fares in the country depend on the kilometers you will cover. The average cost per kilometer is $3. If you live on the outskirts of Luxembourg, you will have to drive to work and perhaps to the stores.
Compared to other European countries such as France, Belgium, and Germany, the transport cost in Luxembourg is cheaper by at least 19 percent.
Healthcare
There are two healthcare systems in Luxembourg, public and private.
he public healthcare system offers free basic services to all residents. Employed people contribute three percent of their gross income monthly to the public healthcare system. On the other hand, employers pay half of their employee’s contributions.
Self-employed people must also contribute to the public system based on their earnings. People with more healthcare needs pay more by almost 10 percent.
The contributions cover hospitalization, childbirth, rehabilitation, medical consultations, and prescriptions.
Most medical facilities in Luxembourg demand that you pay for your treatment upfront and recover later, provided your contributions are sufficient.
The private healthcare system is meant for ex-pats, and a person’s income determines its cost. However, it offers international coverage, so you will use it even beyond the borders of Luxembourg.
Childcare
Like in most European countries, childcare costs are very high in Luxembourg. Finding an alternative way to look after your child is difficult unless you stay home and care for them.
The cost of childcare in Luxembourg is determined by the daycare center’s location and your child’s age.
For instance, you’ll pay $4 an hour for kids over five. Parents whose kids have special needs are charged more, especially in the CBD.
Education
Luckily, education here is free since the state runs most learning institutions. However, the case differs for private schools, as you must pay the tuition fees.
The fees charged in private schools vary depending on location and the curriculum system.
What are the highest-paid jobs in Luxembourg?
Finance and insurance jobs are the leaders in Luxembourg’s highest-paying jobs, followed by jobs in the healthcare sector led by doctors and surgeons.
Below is a list of the highest-paying jobs in Luxembourg:
| Job title | Salary |
|---|---|
| Dentist | $180,092 |
| CEO | $114,624 |
| Physician | $154,773 |
| Data scientist | $102,514 |
| Office manager | $86,340 |
| Construction engineer | $83,897 |
| IT specialist | $76,176 |
| Sales manager | $64,200 |
| Civil engineer | $62,378 |
Taxation in Luxermbourg
Taxation in Luxembourg is the same for residents and foreigners. However, there are some exceptions. You will be taxed if you have lived in the country for over six months.
Residents and non-residents are taxed based on their income and marital status.
For example, if you’re single, you will be taxed on Class 1 contributions, while married couples will be taxed on Class 2 contributions. If you and your spouse earn taxable income, the Class 2 contributions will first be assessed.
A taxable income in Luxembourg starts from $11,853 per year. If you earn less than this amount, you are exempted from tax. The maximum tax rate is 42 percent for an income over $215,770.
Social security in Luxembourg
Anyone working in Luxembourg must be in the social security system. However, the contributions vary depending on their occupation.
The contributions are deducted directly from the salary of both the employees and employers, contributing around 25 percent of the employee’s salary.
Social security contributions offer benefits related to workplace accidents, occupational illnesses, pensions, long-term insurance care, and death.
Pensions in Luxembourg
If you decide to work and live in Luxembourg, you must pay 24 percent of your gross income to the government for state pension and benefits for invalidity citizens.
The contribution comes from the employer, employee, and the state, with each pillar contributing eight percent.
You must make social security contributions for at least 10 years to qualify for pension payments before turning 65. This way, you will be eligible for a partial state pension.
Conclusion
A good salary in Luxembourg is approximately $5,832 per month. This amount will cover all your basic costs and give you a comfortable life.
I hope this guide helps you make an informed move to Luxembourg.