When private individuals wish to hire someone to help them in their home, to look after a child or care for a dependent person, they can follow a simplified administrative procedure for staff management requirements (registration with social security, social security contributions, taxation etc.).

Persons employing domestic staff only need to be in contact with one administrative body, i.e. the Joint Social Security Centre (CCSS) which is responsible for collecting the flat-rate tax and the social security contributions.

Who is concerned

The following are concerned:

• employees who:
  • carry out domestic tasks in a person's private residence;
  • provide childcare services to their employer's disabled children, or children under 14 years of age, on a strictly personal and private basis;
  • provide the necessary assistance and care either to their employer or to someone living in their employer's household, due to their state of dependence (state of a person who, owing to a physical, mental or psychiatric illness, requires significant help and regular assistance from another person for basic day-to-day tasks such as bathing, eating, moving, etc.);
• persons (employers) who employ these workers on a strictly personal and private basis.

How to proceed

Drawing up an employment contract

Employers (one or more members of a private household) are obliged to draw up an employment contract for persons they employ on a personal and private basis.

However, if a family member or another close relation (neighbour or friend) is providing care and help to a legally dependent person, the employer is exempted from having to draft an employment contract and the worker is referred to as an informal carer (aidant informel). Services provided on an occasional basis, with no obligation to do so and with total freedom cannot, therefore, be qualified as a working relationship, even where payment for the services is involved.

Dependent persons may, however, decide to engage the services of a third party under an employment contract.

Form and content of the employment contract

Employment contracts, whether open-ended or fixed-term, must be drawn up, in writing, for each individual employee, no later than the date on which the employee starts work. The signed and dated contract must be produced in duplicate: the first copy for the employer, the second for the employee. The employment contract must include the following:

• the identity of the parties involved;
• the start date of the employment contract;
• the place of work;
• the nature of the work;
• the number of daily or weekly working hours of the worker;
• the normal working times;
• the basic wage or salary and, as the case may be, wage or salary supplements, perks, bonuses or profit shares agreed, as well as the frequency with which employees are to receive the pay to which they are entitled;
• the amount of paid leave to which the worker is entitled, or, if this cannot be quantified when the contract is signed, how this leave is to be awarded and determined;
• the notice period that the employer and employee must give if the contract is terminated or, if this cannot be quantified when the contract is signed, how this notice period is to be determined;
• the duration of the trial period if any.

In addition to the mandatory content of the agreement, the parties are free to include:

• derogation clauses: which deviate from the legal requirements. These are valid only if the derogation is more favourable to the employee and does not impose additional obligations compared to what is provided for by law; or
• complementary clauses: which grant a benefit to the employee (e.g. a bonus).

A fixed-term employment contract (contrat à durée déterminée – CDD) may only be concluded for a specific and temporary task.

Fixed-term employment contracts can be renewed twice provided that the total duration of the contract does not exceed 24 months.

Pay and payslips

Like all other employees, the employee is entitled:

• to the payment of a salary corresponding at least to the social minimum wage;
• to paid leave;
• to the payment of wages during public holidays;
• to compliance with the legal notice in case of dismissal, etc.

Employees are paid on a monthly basis, and at the latest on the last day of the month. Employers are exempted from issuing pay slips to their domestic staff. Each year in March, the Joint Social Security Centre (CCSS) issues an income certificate for the previous year to the employer and the employee by:

• depositing the certificate in the eDelivery inbox of the private eSpace on MyGuichet.lu; or
• failing that, by post.

This certificate serves as a supporting document for the Luxembourg Inland Revenue.

Statutory leave and public holidays for part-time employees

Full-time employees are entitled to 26 days of paid annual leave (26 days × 8 hours = 208 hours of paid annual leave). The principle of proportionality is applied for part-time employees.

In addition, employees are entitled to payment for public holidays. This also applies to part-time employees. Persons working 40 hours a week are entitled to 11 public holidays per year (or 11 days × 8 hours = 88 hours). The principle of proportionality is, once again, applied for part-time employees.

End of the working relationship

Employers and employees can terminate the employment contract by following the general rules applicable to the termination of employment contracts.

The salaried worker can:

• resign with immediate effect for serious misconduct on the employer's part; or
  
• resign with advance notice in other cases.

Similarly, the employer can:

• dismiss the employee with immediate effect in the event of serious misconduct on the employee's part; or
  
• dismiss the employee with advance notice:
  • for reasons related to the attitude or conduct of the employee (for example, for professional incompetence); or
    
  • for economic reasons (when the income of the household no longer allows to cover this expense).

In the event of termination of the employment contract, a declaration of end of employment must be made to the Joint Social Security Centre.

Registering the employee with the Joint Social Security Centre

Sending the declaration of start of employment to the Joint Social Security Centre

Under the simplified procedure, the employer:

• submits an online 'Employee declaration form for a private household / host family' via MyGuichet.lu (available under 'Forms / Online services'). The authenticated procedure requires a LuxTrust product or an electronic identity card (eID); or
• fills in a single form 'Employee declaration form for a private household / host family' (available under 'Forms / Online services') and sends it to the CCSS,

no later than 8 days after the hiring of the person in the household.

The employer enters the net hourly salary, in the form of:

• a monthly salary (if fixed);
• an hourly wage (if the monthly salary is fixed).

If the employee does not yet have a national identification number (13-digit social security number) at the time of the declaration, the employer must:

• enter the employee's date of birth (format: year, month, day);
• attach a copy of the employee's identity document (identity card or passport).

A confirmation is automatically sent to both the employee and the employer after registration.

The declaration of employment in a private household is valid as:

• operating declaration for employers (the declaration allows private households that are first time declarants to obtain a social security number as an employer);
• declaration of start of employment for the worker;
• declaration of salaries.

In view of this simplified declaration procedure through the Joint Social Security Centre, private households hiring employees are automatically exempt from compulsory membership with the Employers' Mutual Insurance Scheme.

Joint Social Security Centre employee registration procedure

Based on the data in the declaration, the CCSS will register the persons employed in the household and complete the rest of the procedure such as:

• calculation of the gross salary: in order to calculate the gross salary, the CCSS will apply the health, pension and long-term care insurance rates as well as a 10 % flat-rate tax.
• calculating the social contributions to be paid by the employer and collecting said contributions and the withholding tax on a monthly basis;
• the calculation of withholding tax and payment of tax to the Luxembourg Inland Revenue. The CCSS is responsible for collecting the 10% flat-rate tax from the employer, declaring it and paying it to the Luxembourg Inland Revenue;
• issuing a tax card;
• the monthly declaration of working hours and salaries.

Checks by the employer and employee of data held by the Joint Social Security Centre

At the end of each six-month period, the CCSS sends the employer and the person employed a statement containing:

• the average number of hours worked per week; and
  
• the declared net earnings.
  

The gross monthly salary and monthly contributions are indicated on the back of the document.

Thus, both the employer and the employee can check the data and report any changes. The number of working hours is multiplied by the ratio 4.33 (i.e. 52 weeks divided by 12 months) and by the hourly salary in order to calculate the monthly salary.

The employer and/or employee can report, in writing, any difference between the declaration and the actual salary paid.

Any changes to be made to the number of hours or net salary can be reported to the CCSS:

• through an authenticated online procedure via MyGuichet.lu (available under 'Forms / Online services'); or
• by sending to the CCSS by post the document which states:
  • the average number of hours worked per week; and
  • the net salary.

These changes should be reported to the CCSS ideally at the time of their occurrence. The CCSS will then make the necessary changes.

Employee disaffiliation procedure and declaration of end of employment

In the event of termination of the employment contract, the employer must declare the end of the employment relationship to the CCSS no later than 8 days after the end of the contract. This declaration of end of employment is done:

• through an authenticated online procedure via MyGuichet.lu (available under 'Forms / Online services'); or
• by means of the departure form ('Déclaration de sortie' - available under 'Forms / Online Services') to be sent by post to the CCSS.

The deregistration date is the day on which the employment relationship ends or, if applicable, the last day of notice.

In the event of an employee's sick leave or maternity leave, no deregistration is required as long as the period of absence is compensated by the National Health Fund (CNS).

A confirmation of deregistration is automatically sent to both the employee and the employer.

Taxation

Flat-rate taxation of the employee

The employee is taxed on a flat-rate basis. The flat-rate tax amounts to 10 % of the net salary, social contributions and long-term care insurance. This tax must be paid by the employer.

In principle, the flat-rate tax is definitive. Under flat-rate taxation, however, employees may end up paying more tax than they would have paid under the normal tax regime. For this reason, employees may ask the Luxembourg Inland Revenue to make a tax adjustment at the end of the tax year. This application can be made:

• either by submitting an annual statement (depending on whether the employee is resident or non-resident);
• or on the basis of taxation by assessment by submitting an income tax return (depending on whether the employee is resident or non-resident).
  

The account statement issued by the CCSS counts as a valid salary certificate.

Tax card

The person employed does not have to submit a tax card. If such employees should, after all, be required to submit a tax card, then their employer should submit the card to the Luxembourg Inland Revenue – RTS Tax office in Esch-sur-Alzette, quoting the reference 'personnel de ménage’ (domestic staff).

The employer must state, on the back of the tax card:

• their own Luxembourg national identification number (13-digit number).
• their surname, first name and address;
• the fact that the employee is subject to the 10 % flat-rate tax.

Tax credit

The Joint Social Security Centre awards domestic staff tax credits of EUR 25 per month or EUR 1 per day of registration for partial months

Incapacity for work of domestic staff

The National Health Fund (Caisse nationale de santé – CNS) reimburses employers for any sick leave paid to their domestic staff. The employer is required to advance, on behalf of the CNS, the pecuniary compensation relating to the month during which the incapacity for work occurs and the following month.

In the event of an incapacity for work, the employee is required to inform their employer of the situation. Employees must also notify the CNS of their incapacity for work, either by phone, or by submitting their medical certificate. The CNS sends a special form to the employer who must indicate the hours of sick leave. On the basis of the completed form, the CNS will reimburse the costs.

Forms / Online services

Who to contact