The national statistics institute STATEC has published a report in which it presented the impact of border crossers in the scale payments in 2022.
In 2022, the remuneration of incoming cross-border workers in Luxembourg amounted to €15.1 billion, while the remuneration received by outgoing cross-border workers amounted to €2 billion, thus leading to a deficit of €13.1 billion in the remuneration section of employees of the balance of payments. For the year 2022, social contributions received were slightly lower social benefits paid to non-residents (excluding unemployment benefits and aid financial aid to students residing abroad).
The Luxembourg labour market is distinguished by the strong presence of cross-border workers, with €15.1 billion in remuneration paid to employees incoming cross-border workers against €2 billion to outgoing employees during the period in question.
As a real pole of attraction for cross-border workers, the Grand Duchy maintained itself in 2022, for the third consecutive year, on the third 3rd place in Europe in terms of cross-border remuneration amounts paid, behind Switzerland and Germany, STATEC noted.
Between 2005 and 2022, the number of incoming cross-border workers in Luxembourg experienced an average growth of 3.8% per year. Although progress was slowed in 2020 due to the COVID-19 pandemic, a recovery exceeding the average was maintained in 2022 (up 4.3% compared to 2021).
In 2022, the total number of employed cross-border workers in Luxembourg amounts to 221,251. The largest group comprises border workers residing in France. More specifically, French cross-border workers represented 53.6% of the salaried employees in Luxembourg in 2022 compared to 51.7% in 2005. The share of cross-border workers residing in Germany has increased since 2005 to reach 23.4% in 2022. On the other hand, the share of cross-border workers who reside in Belgium has decreased since 2005 to reach 23% in 2022.
Average annual salaries (minus social security contributions payable by employers) of cross-border workers vary according to their country of origin. In 2022, the French border workers affected on average around €54,600 per year, or around €12,500 less than their Belgian and German counterparts.
International and European institutions constitute a statistical particularity concerning the origin of cross-border workers: although physically established in a country, they are not not considered part of the national economy of that country, because they are generally exempt from national laws or regulations. Therefore, these institutions form separate “countries” and their employees are considered cross-border workers leaving their host country.
This phenomenon mainly concerns Belgium and Luxembourg. In 2022, Belgian residents and Luxembourgers respectively received €4.6 billion and €1.8 billion respectively in remuneration from European institutions.
The number of cross-border workers entering Luxembourg (221,251 in 2022) greatly exceeds that of outgoing cross-border workers (13,956). However, in practice, only 1,574 people cross borders to get to work in 2022. The majority of outgoing cross-border workers were employed by European or international institutions. Luxembourg hosts several Euro-institutions: the European Commission, the European Investment Bank and the European Court of Justice. Other extraterritorial European institutions are also established on Luxembourg territory, such as Eurocontrol, the EFTA Court of Justice and NSPA (Nato Support and Procurement Agency). In 2022, international organisations employed at least a total of 15,918 people in Luxembourg, including 12,382 who reside on Luxembourg territory. The other 3,536 employees of international organisations in Luxembourg reside outside the country. STATEC emphasised that these employees’ remuneration streams were not included in Luxembourg’s balance of payments because these are transactions between entities and non-residents. Among outgoing cross-border workers, European civil servants and international securities affected an average remuneration higher than Luxembourg residents working in bordering countries. This is notably due to their higher degree of qualification and differences between social security contribution rates payable by employers.
By balancing revenue and expenses for all four main sections, STATEC noted they found that in 2022 the social benefits paid exceeded the social contributions collected. Unemployment benefits paid to residents of neighbouring countries, which amounted to €64.7 million in 2022 and financial aid for students residing abroad of €35 million were not recorded as social benefits but respectively as miscellaneous current international transactions and current transfers.
Employee remuneration resulted in a deficit of €13.1 billion and has continued to increase since 2018, STATEC added. Income taxes have also been increasing over the years and resulted in a surplus of €1.45 billion in 2022.
