Credit: STATEC
On Friday 4 August 2023, Luxembourg's Ministry of Social Security, together with the Mutuality of employers, confirmed that September is likely to see the third indexation of 2023, meaning a 2.5% increase in salaries.
The tripartite agreement of 7 March 2023, between the government, the UEL and the OGBL, LCGB and CGFP trade unions, concerns the third indexation tranche of 2023, whereby the State compensates the third index tranche over the year 2023 as well as the month of January 2024 following the triggering (of the third indexation this year). This means that employers will not have to pay as much.
The contribution rates of the 4 classes of the Mutuality of employers will be reduced up to the amount to be compensated which is based on the total payroll (including overtime pay and bonuses, without taking into account the maximum annual contributory amount), then related to the contributory total for the Mutuality of employers. The drop in rates will mean that affiliated employers will pay less contributions due to the Mutuality of Employers from 1 January 2024 while remaining protected against the same risks. The difference will be covered by the State through existing mechanisms.
Depending on the rate of each class, the compensation will be entirely carried out over the 2024 financial year (classes 3 and 4), or even spread over the 2025 financial year (class 2) or even 2026 (class 1) to prevent the rates from become negative.
The Mutuality of Employers will send a more detailed communication to affiliated employers. The rates for the four classes applicable in 2024 will also be communicated by the Employers' Mutual Fund towards the end of 2023.
