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.
The following are concerned:
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.
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:
In addition to the mandatory content of the agreement, the parties are free to include:
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.
The parties to the contract may also amend the employment contract by means of an addendum, following specific procedures depending on the nature of the desired amendment.
Like all other employees, the employee is entitled:
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:
This certificate serves as a supporting document for the Luxembourg Inland Revenue.
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.
Employers and employees can terminate the employment contract by following the general rules applicable to the termination of employment contracts.
The salaried worker can:
Similarly, the employer can:
In the event of termination of the employment contract, a declaration of end of employment must be made to the Joint Social Security Centre.
Under the simplified procedure, the employer:
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:
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:
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:
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.
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:
At the end of each six-month period, the CCSS sends the employer and the person employed a statement containing:
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:
These changes should be reported to the CCSS ideally at the time of their occurrence. The CCSS will then make the necessary changes.
An employer who does not wish to use the simplified procedure set up with the CCSS to declare their employee's salaries may declare said salaries using MyGuichet.lu.
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:
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.
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:
The account statement issued by the CCSS counts as a valid salary certificate.
Making a declaration concerning domestic staff enables employers to benefit from a maximum fixed-rate tax allowance of EUR 5,400 per year (by submitting a tax return). This fixed-rate tax allowance offsets the fact that employers are required to pay a flat-rate tax of 10 %.
Thus, the income certificate enables the employer to assert and document their rights to tax deductions for extraordinary expenses. Employers attach this document to their tax return.
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:
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
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.
Employers do not need to continue to pay salaries to employees who are on maternity leave.
Modification de déclarations semestrielles d'heures et de salaires dans un ménage privé