Indexation: Luxembourg salaries to increase from 1 June 2026

From 1 June, all salaries in Luxembourg will increase thanks to automatic indexation.

Reminder of how indexation works

In Luxembourg, salaries are automatically indexed to inflation. This means that whenever the country’s inflation rate rises by 2.5%, salaries increase as well. This applies to all wages in the country, as well as pensions and public sector pay.

Indexation helps to ensure that workers’ purchasing power does not decline due to rising consumer prices by increasing salaries at the same pace. The last indexation took place in May 2025, just over a year ago.

The indexation will appear on June 2026 payslips.

The context behind the indexation

The June 2026 indexation comes amid a global crisis, particularly linked to the conflict between the United States and Iran. Certain prices, especially fuel prices, have risen rapidly due to the blockage of the Strait of Hormuz, leading to inflation high enough to trigger the index.

Current forecasts suggest that a second indexation could take place at the end of the year if the conflict continues. However, if this happens, it could still be postponed until the first quarter of 2027 to avoid placing excessive financial pressure on businesses too quickly. Various scenarios remain possible, and it is still unclear which one will actually occur.

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