Employer of Record Luxembourg

Think of it like this: Agility EOR becomes the legal employer of your employees, taking care of all the paperwork and compliance headaches.

Agility EOR

• We manage the onboarding process and ensure everything’s in order before your employee starts
• We make sure your employees are treated fairly and compliantly in their relevant territory
• We take care of all HR matters, and can answer any and all HR queries you may have e.g. maternity/paternity leave, holidays, sick pay, and more
• We provide compliant contracts, process local payroll, and file taxes
• We issue payslips and handle payments to the employee and authorities

Your Company

• You find and manage your employees’ daily tasks
• You support their development through their work
• You follow our guidance on employment laws and best practices
• You ensure payroll bills are paid to Agility EOR on time

Benefits of using an Employer of Record (EOR)

• Faster and easier hiring: No need to set up your own legal entity.
• Reduced risk and compliance burden: We handle the legal and administrative complexities.
• More time and resources: Focus on your core business while we manage your employees.

There are various ways to employ people in Luxembourg, each with differing levels of costs and compliance:

Employee is employed by you and paid by you from your overseas Company

• Pros: This option appears to be the cheapest and simplest.
• Cons: It does not allow for the payment of required social security contributions, and Luxembourg employment law will still apply to the employee.

Entity Set-up

• Pros: This option could be the most cost-effective for employing a large number of personnel, typically more than 15.
• Cons: Setting up a legal business entity and adhering to Luxembourg’s employment and tax regulations can be costly and time-consuming, particularly for smaller operations. It often becomes impractical for businesses with fewer than 15 employees.

Using an Employer of Record

• Pros: In Luxembourg, using an Employer of Record service is the most time- and cost-effective solution for managing payroll, HR, and compliance tasks, especially for teams smaller than 15 employees.
• Cons: It can be costly for hiring a large number of employees, and selecting the right Employer of Record provider can be challenging.

Hire a contractor in Luxembourg

• Pros: This solution is cost-effective when the worker is not exclusive to your company and has the flexibility to send a substitute in their absence.
• Cons: Hiring a full-time worker dedicated solely to your company without proper employment classification is a legal violation in Luxembourg. Misclassification can result in penalties ranging from fines to criminal charges.

Yes, as long as the worker is engaged with other companies, can determine how to perform their own work, and can send another contractor in their place, they can be classified as a contractor.

However, in Luxembourg, if a worker is solely dedicated to your company and their duties and tasks are dictated by your organization, they must be classified as an employee. Failing to do so violates Luxembourg employment law.

Misclassifying an employee can result in substantial fines, the obligation to pay outstanding holiday pay and social security contributions, the potential requirement to establish a local presence, and possible legal action from the employee for breached employment rights.

The initial steps to establishing your business in Luxembourg include registering it with the Commercial Register and obtaining a trade license from the appropriate authorities.

Although the initial registration process may seem straightforward, additional complexities arise when setting up a physical office for tax purposes, opening a Luxembourg bank account (which often necessitates in-person presence), managing payroll software that complies with Luxembourg regulations, and meeting tax filing obligations.

Hiring people in Luxembourg involves meeting specific legal requirements. Simply put, HR compliance ensures that your company strictly adheres to all employment and work practice regulations. But why is this so important? HR compliance in Luxembourg is more than just a formality; it’s essential for protecting both your employees and your business.

Adhering to employment regulations ensures fair treatment of your workforce, covering aspects such as sick leave, annual leave, minimum wage, and proper working hours. This not only creates a positive work environment but also reduces the risk of financial penalties, legal issues, and potential lawsuits due to non-compliance.

By partnering with Agility EOR as your Employer of Record in Luxembourg, you can streamline tax and social security obligations. We handle all employee-related filings and contributions, ensuring full compliance and allowing you to concentrate on running your business with confidence.

Your organization is still in charge of managing your team daily, including handling performance concerns, enforcing disciplinary measures when needed, and promoting a positive work environment through open communication, even though Agility EOR manages the complexities of Luxembourg employment law and compliance.

Agility EOR handles the legal side of things in Luxembourg, so you can focus on managing your team and their daily tasks.

Employers in Luxembourg are responsible for withholding income tax and social security contributions from employees’ salaries, while employees contribute a portion of their earnings to social security funds.

Workers who are employed by a Luxembourg Employer of Record are given a regular employment contract along with legal safeguards. This covers relevant tax credits as well as statutory benefits including maternity leave, yearly leave, and sick pay. It’s crucial to remember that everyone who lives in Luxembourg is covered by the public healthcare system — not just employees.

Agility EOR handles the administrative burden of HR compliance for you:

Trusted Partners: Agility EOR works closely with top employment lawyers and advisors in Luxembourg. This collaboration guarantees that your employment contracts and other critical documents fully comply with local legal regulations.

In-Depth Knowledge: We possess a comprehensive knowledge of the complex elements of Luxembourg employment law, covering areas such as payroll, social security, data privacy, notice periods, and remote work regulations.

Swift Action: If an problem occurs, our internal team are instantly on hand to help and assist.