Payment of social contributions for employees

This page was last modified on 13-03-2013

Any person carrying out a professional activity must, in principle, be registered with the social security in order to benefit from social protection in case of illness, unemployment, occupational accidents, pension, etc.

To this end, an employer must declare each month the gross salaries paid to employees, as well as the exact number of hours worked to the Joint Social Security Centre (Centre commun de la sécurité sociale - CCSS).

Based on these salaries, the CCSS calculates each month the sum of social contributions for each employee and informs the employer of the total sum of social contributions to be paid. This sum includes the contributions covered by the employee as well as the social contributions covered by the employer.

The social contributions owed by employees are directly deducted from wages by the employer, who takes responsibility for their overall payment in accordance with the monthly invoice sent to him by the CCSS.

Forms / Online services

Carry out your procedure:

Who is concerned

The following are involved in the payment of social contributions:

  • the employer who must pay social contributions to the CCSS;
  • if applicable, experts in the field of payroll (fiduciaries, etc.) appointed by the employer.

Prerequisites

When social contributions are paid, it is assumed that:

How to proceed

Applicable contribution rates

The CCSS sends the applicable rates and possible changes to the employer by post.

Distribution of contribution rates between the employer and salaried worker

The employer withholds the salaried worker contributions on each gross monthly salary when calculating the salary.

Distribution of contribution rates between the employer and salaried worker

 

Salaried worker's part

Employer's part

Health insurance (on 1 November 2015)

  • Benefits in cash: 0.25 %

  • Benefits in kind: 2.80 %
  • Benefits in cash: 0.25 %

  • Benefits in kind: 2.80 %

Pension insurance

8.00 %

8.00 %

Long-term care insurance

1.40 %

-

Accident insurance

-

1.10 %

Occupational health (STM)

-

0.11 %

Mutual insurance scheme

-

depends on the risk category of the business

The monthly contribution base cannot be less than the social minimum wage for non-qualified workers aged 18 and over or, where applicable, than the social minimum wage applicable to adolescent workers.

In principle, the monthly contribution wage cannot be over 5 times the social minimum wage for non-qualified workers aged 18 and over.

Accident insurance

The CCSS automatically informs the Accident Insurance Association every time a new employer registers with the social security.

Accident insurance contributions are fully covered by the employer.

Since 1 January 2011, companies do not pay accident insurance contributions according to the risk category applicable to their main activity, but rather according to the single contribution rate of 1.10 %.

Employers' mutual insurance scheme

Since 1 January 2009, all businesses must be registered with the Employers' mutual insurance scheme (Mutualité des employeurs - MDE). This mutual insurance scheme is largely financed by a contribution covered by employers. The management of registrations as well as the collection of contributions is handled by the CCSS.

Businesses are divided into 4 categories of contributions, according to the rate of financial absenteeism of their salaried workers during the previous year.

Calculation method for the financial absenteeism rate
Rate of financial absenteeism =

Amounts reimbursed to a business due to sick leave
(of salaried workers and self-employed workers)

 

Contribution base
(for salaried workers and self-employed workers)

The following are excluded from the calculation:

  • sick leave for illness during the trial period up to a maximum of 3 months;
  • sick leave due to accident at work or occupational illness;
  • absences due to maternity or adoption leave;
  • absences due to leave for family reasons;
  • absences for family hospice leave.
Risk category and contribution rate to the employers' mutual insurance scheme

Risk category

Absenteeism rate

Contribution rate

Category I

< 0.65 %

0.51 %

Category II

< 1.60 %

1.32 %

Category III

< 2.50 %

1.94 %

Category IV

> 2.50 %

3.04 %

The Joint Social Security Centre (Centre commun de la sécurité sociale - CCSS) calculates the total monthly sum of social contributions, based on the gross monthly salaries declared by the employer on the list of salaries. They will send an account statement to the employer before the 15th of every month with the total sum of social contributions to be paid (employer's and employees' contributions).

Paying social contributions

CCSS account statement

The account statement always has 3 distinct parts:

'Debit' part

In general, the following elements may be included in this part:

  • the debit balance from the previous statement;
  • the contributions divided up by the social security institutions for the month in question (month M);
  • the amount of the sums corresponding to potential adjustments in contributions made for the period prior to month M;
  • the reversal of the instalment claimed for month M;
  • the instalment due for the following month (M+1);
  • potential outstanding interest on late payments;
  • fines, if applicable.
'Credit' part

In general, the following elements may be included in this part:

  • the credit balance from the previous statement;
  • the sum of the payment or the sum of the cumulated payments booked after the previous statement;
  • a potential reimbursement of contributions or a reversal (reverse entry in the account statement);
  • credit transfer from one account to another.
'Balance' part

The overall balance corresponding to the sum of social contributions to be paid is stated at the bottom of the account statement and is calculated from the sum of the elements in the 'debit' and 'credit' parts.

Payment

The employer must settle the balance stated on the CCSS monthly invoice within 10 days of the date of issue of the contributions statement of the CCSS. This deadline must be respected in all circumstances, even if the employer wishes to make a claim relating to the calculation of social contributions.

Valid claims will be subject to a subsequent adjustment.

In order to allow the CCSS to book the payments correctly, the employer must:

  • indicate his registration number on the transfer or payment order;
  • pay the amount on each account statement separately, in case employees are registered under different employer registration numbers.

Furthermore, the employer may simplify the payment transactions by granting direct debit to the CCSS.

Contributions which are not paid before the deadline lead to interests on arrears starting from the first day of the first month after the contribution deadline. The rate for interest on late payments is set at 0.6 % per whole calendar month; the fractions of months are disregarded.

 

Enforced collection of contributions

The Joint Social Security Centre will systematically initiate the enforced collection of contributions procedure the moment the contribution arrears have reached 4 months.

The enforced collection procedure starts with a formal demand to pay which is sent to the person concerned requesting him to:

  • either pay the outstanding contributions within 15 days following receipt of the registered letter;
  • or to accept the payment deferral offered by the Joint Social Security Centre.

The employer can apply for a longer deadline as the one offered. However, extension of deadlines will only be granted on an exceptional basis.

Late payers who have been granted an extension of the payment deadline are still required to pay the current contributions including an annual late payment interest rate of 7.2 %.

Where the debtor does not meet the new payment deadline granted or if he has not accepted the payment deferral offered, the Joint Social Security Centre will initiate the enforced collection of contributions procedure and notify an administrative constraint by registered letter to the debtor. A bailiff will enforce the constraint. In the event the bailiff notes that the enforced collection is not possible for lack of funds, the Joint Social Security Centre will forward the case to a lawyer and start filing a bankruptcy petition against the debtor.

Who to contact

125, route d'Esch
L-2975 - Luxembourg
Luxembourg
Phone: (+352) 40141-1
Fax: (+352) 40 44 81

Opening hours
08.00 - 16.00