Payroll Newsflash

Social security and taxation of cross border employees

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Risking double taxation or losing your social security system? Never! How to avoid it: Closely monitor your employees' social security and tax thresholds.
Contents

As a reminder, since January 1, 2024, all cross-border workers from countries bordering Luxembourg can work up to 34 days per year outside the Grand Duchy while retaining full taxation of their salary in Luxembourg.

Any excess will result in taxation in the employee's country of residence and a number of related formalities…!

From a social perspective, the framework agreement that took effect on July 1, 2023, provides for a threshold of 49%, provided that specific conditions are met.

If these conditions are not met, the employee will fall under European Regulation 883/2004, which sets the limit on working time in the country of residence at 25%. Any excess could result in your employee being reverted to the social security system of their country of residence.

As a reminder, any time spent out of Luxembourg for your employees must be accompanied by administrative formalities, whether or not the thresholds are exceeded.

Do not hesitate to contact us for further information or for assistance in monitoring, implementing, or reporting these benefits outside the Grand Duchy.

 

Contact

Any questions? Don't hesitate to contact us, so we can discuss the most suitable solution together: HumanCapitalServices@lu.gt.com.