According to Statec, 47% of Luxembourg’s 458,200 employees are cross-border workers (half of whom are French). Since the lockdown of 2020, working remotely has become an integral part of the labour market. According to the same institute, two out of five employees have worked from home in 2021.
Home office in Luxembourg since the pandemic crisis
In 2020, during the lockdown, Luxembourg experienced a sharp increase in employees working remotely with a historic rate reaching 52%. The country had also been the leader in remote work in Europe that same year. During the two years of the pandemic crisis, home office became a normality.
Nowadays, remote working is still possible and is subject to a simple agreement between employer and employee. For an employee living in Luxembourg, there is no real limit to the number of home office days. However, this is to be determined by each company in order not to harm its performance, productivity but also its cohesion.
The difficult situation of cross-border workers
During this difficult time, special measures were implemented to allow cross-border workers to work from home as much as possible, without having any impact on their country of residence. However, since the 1st of July 2022, these measures have been lifted.
These latter were about the European regulations on social security and tax systems. Thus, if an employee does more than 25% of their work in their country of residence (remotely), they must be attached to the social security institution of this country. As to the tax system, an employee's work is taxable in the country where they work. However, if it exceeds a certain quota (number of days) of work in their state of residence, they will be taxed in that state. It is important to know that the tax rates, which combine income tax and social security contributions, are lower in Luxembourg than in its border countries.
These quotas vary from country to country and are set in agreement with the respective governments. For example, German cross-border workers are allowed to work remotely only 19 days per year. This is the lowest figure and far below that of its neighbors. Belgium, on the other hand, allows up to 34 days of home office for its residents working in Luxembourg.
Finally, until now, France had set its quota at 29 days of annual home office for its cross-border workers. However, on the 30th of September 2022, after long negotiations, Luxembourg's Minister of Finance, Yuriko Backes, and her French counterpart, Bruno Le Maire, agreed to increase this quota. Thus, from the beginning of 2023, French cross-border workers will benefit from five additional days of remote work, i.e. 34 days per year, equivalent to their Belgian neighbors.
How about you, how many home office days would you like to have? 🤔
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