Luxembourg: Your Luxembourg wages will increase from the summer!

Luxembourg: Your Luxembourg wages will increase from the summer!


LUXEMBOURG – The indexation of salaries and pensions, which was due to end this summer, has been replaced by an energy tax rebate. Here are the planned increases.

Good news is waiting for you on your payroll soon.

A few more weeks of waiting … While Luxembourg is facing record levels of inflation, the flagship measure “Solidaritéitspak” is due to enter into force in early summer. The energy tax credit (CIE) is intended to compensate for the deferral of the index tranche, which was to be launched in the same period.

It is clear that employees and pensioners who earn less than € 44,000 gross per year will receive an additional € 84 on their payroll. Above this limit, the amount of indemnity is degressive. For example, count € 76 for people who earn between € 44,000 and € 68,000 a year. Employees with an income of more than € 100,000 are not affected.

The way in which the government can limit the effects of the index on corporate finances without penalizing people with average and modest incomes. The measure must be maintained until April 2023, which is the expected date for the postponement of the index tranche to this summer. “A lot has been done for households (…) This government has taken the necessary measures,” DP Minister Yuriko Backes said in an interview with paper jam and shared on a government website on Friday.

“Significant impact on the state budget”

The package will have a “significant impact on the state budget,” the minister warned. Initially estimated at 750 million euros, the cost of the measures should eventually reach 805 million euros, due to an additional month of energy tax rebates. Employee-based support was originally scheduled to begin in August, but soaring inflation is expected to cause the first CIE to fall in July.

Nevertheless, there is no account with the Chamber of Employees. The authority representing employees and pensioners in Luxembourg stated in a communication from the end of last week that “the energy tax rebate introduced by law does not constitute valid compensation for the postponement of index tranches”.

“The good situation of Luxembourg companies, based on the latest accounting data, does not justify manipulation of the index (…) Many employees and pensioners will lose purchasing power compared to the current maturity date. index tranches, ”he believes.

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