The Luxembourg Social Security authorities have announced1 the 2023 minimum and maximum bases for social security contributions for employees (an adjustment that takes place annually) as from 1 February 2023:
- minimum annual wage base is set at EUR 29,364 (12 x EUR 2,447.07), rounded off for individuals 18 years and up (“non-qualifiés”);
- for employees over the age of 18 who have completed a qualifying level of education, the minimum annual wage base is EUR 35,237 (12 x EUR 2,936.48 per month, rounded off) off for individuals 18 years and up (“qualifiés”); and
- the maximum annual contribution for employees is EUR 146,824 (12 x EUR 12,235.34, rounded off). This applies for all insurance regimes except “assurance dépendance”).
WHY THIS MATTERS
International assignment cost projections and budgeting for assignments to Luxembourg and for assignees outside Luxembourg still subject to Luxembourg taxation should take into account the changes in the social security wage ceiling and wage base. Where called for, employers may need to make payroll adjustments and update hypothetical tax calculations for tax-equalised assignees. International assignment cost projections and budgeting for assignments to Luxembourg and for assignees outside Luxembourg still subject to Luxembourg taxation should take into account the changes in the social security wage ceiling and wage base. Where called for, employers may need to make payroll adjustments and update hypothetical tax calculations for tax-equalised assignees.
Adjustments to the so-called social security parameters are largely routine. Nevertheless, given the impact of these changes to the operation of Luxembourg payroll/shadow payroll, these changes should be communicated to relevant stakeholders as soon as possible to help ensure that payroll processes and software can be updated in a timely fashion. Pre-departure conversations with assignees who will be subject to Luxembourg social security should include mention of applicable rates, ceilings, and wage bases and the impact on the assignee.
1 For the updated base and rate table issued by the Ministère de la Securité Sociale, click here (in French).
The information contained in this newsletter was submitted by the KPMG International member firm in Luxembourg.
GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
© 2023 KPMG Luxembourg, Société anonyme, with registered office at 39, Avenue John F. Kennedy, L-1855 Luxembourg, registered with RCS Luxembourg under number B149133, and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the KPMG global organization please visit https://kpmg.com/governance.