Euro Accountancy & Finance Services are fully registered as a Luxembourg Payroll provider and, by law, any person working in Luxembourg must be employed by a provider of payroll in Luxembourg. The individual is employed through EAFS with income paid in the form of salary, expenses and allowances. The proportion of each depends and rests on individual circumstances.
Companies and organisations are constantly leveraging the worldwide market to extend their business operations and widen business goals and targets. Within these new markets, a local presence is vital for success. For overseas and foreign companies, Luxembourg offers itself as a premier destination for any globally growing multi-national company, not only because its major entrances centers to the continent but also because the people of Luxembourg as a nation are welcoming to any foreign investment and are hard working, well-educated and highly motivated.
Although employers and organisations will reap the benefits of working in Luxembourg, a number of challenges will present themselves; from complying with the complex Luxembourg labour laws through to ensuring that employees receive accurate and timely compensation. In order to combat these challenges and hurdles, it is advisable to follow the guidelines and the important aspects that employers should know.
Getting Started with Luxembourg Payroll
The first point to heed for payroll to be a success within Luxembourg is to set up the business properly. Although the Luxembourg Payroll law doesn’t require any employers to establish an office branch or legal entity, it is strongly advised and the usual general practise to do so. Whichever way you choose, the company is required to have a designated representative within the country in which to act as a liaison with the relevant tax office or social security organisation.
Companies are also required to open a local bank account for making the necessary payments to local authorities, also registering with the Luxembourg tax office to ensure contributions from employee and employers are received on a regular basis.
Complying with Luxembourg Payroll and Luxembourg Employment Law…
Another important step is complying with the Luxembourg Payroll employment laws. Designed to protect the rights of Luxembourgian workers, a highly important aspect requires employers to recognise that collective labour agreements take priority over statue law, if they are more favourable to the employee. Alongside this, minimum conditions already established by the collective agreement can only be improved upon and can’t head back the other direction in an individual employment contract.
Employment laws within Luxembourg also outline the maximum number of hours that can be worked, usually between thirty six and forty hours per week (with overtime pay for up to 48 hours), paired with the minimum wage in Luxembourg of €342.85 per week.
The laws also principle the right to paid leave of a minimum of 20 days per annum, also including a holiday bonus equal to eight per cent of the employee’s annual earnings.
For more information on Luxembourg Social Security, Luxembourg Payroll, Working in Luxembourg or Contracting in Europe visit the Euro Accountancy & Finance Services website.