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Key Terms

  • Gross Salary: Total compensation before deductions, including base salary, bonuses, allowances, and benefits
  • Net Salary: Salary after deduction of employee social charges and income tax
  • Social Charges (Charges Sociales): Contributions to social security system by employees and employers
  • Employee Social Charges: 14.2% of gross salary (health 2.8%, pension 8%, dependency 1.4%, employment fund 2%)
  • Employer Social Charges: 15.7% - 16.7% of gross salary (same as employee plus accident insurance 0.5% - 1.5%)
  • CCSS (Centre Commun de la SĂ©curitĂ© Sociale): Social security administration in Luxembourg
  • Contribution Ceiling: Maximum salary subject to social charges (€9,000/month as of 2025)
  • Health Insurance (Assurance Maladie): Social security component covering medical care (2.8% employee, 2.8% employer)
  • Pension Insurance (Assurance Pension): Social security component covering retirement (8% employee, 8% employer)
  • Dependency Insurance (Assurance DĂ©pendance): Social security component covering long-term care (1.4% employee, 1.4% employer)
  • Employment Fund (Fonds pour l'Emploi): Social security component covering unemployment (2% employee, 2% employer)
  • Accident Insurance (Assurance Accident): Social security component covering work accidents (0.5% - 1.5% employer only)
  • Employee: Person working under employer control, entitled to social security and employment law protections
  • Independent Contractor: Person working independently, not entitled to social security or employment law protections
  • Overtime: Hours worked beyond standard 40-hour workweek (150% first 2 hours, 200% thereafter)
  • Minimum Wage (Salaire Minimum): Guaranteed minimum salary (€2,570.93 unskilled, €3,085.12 skilled as of 2025)
  • Meal Vouchers (Chèques-Repas): Meal benefit up to €10.80/day exempt from social charges
  • Benefits in Kind: Non-cash benefits (company car, health insurance) subject to social charges
  • Payroll Declaration: Monthly report to CCSS with employee and salary information
  • Account 641 (PCN): Salaries and wages expense account
  • Account 642 (PCN): Employer social charges expense account
  • Account 4281 (PCN): Social charges payable liability account

End of Chapter 29 Key Terms