Remote work in Luxembourg: the two thresholds that decide tax and social security

Remote work in Luxembourg is first a question of geography, because a large share of the people on a Luxembourg payroll live in Belgium, France or Germany and commute in. For them a day at the kitchen table is a day worked in another country, and two separate sets of rules start counting. For someone who lives in Luxembourg and works from home there, only the domestic telework rules apply.

The two thresholds are different numbers set by different instruments. Income tax is settled by a day count: each of the treaties with Belgium, France and Germany tolerates 34 days a calendar year worked outside Luxembourg. Social security is settled by a share of working time under Regulation (EC) No 883/2004, the EU coordination regulation, which has to stay under half, the ceiling usually written as 49.9%. Clearing one test says nothing about the other.

Employing through Employer of Record Luxembourg changes neither threshold, because both are set by treaty and EU law rather than by the employer. What it changes is who files: the EOR is the legal employer, declares the employee to the Centre commun de la sécurité sociale (CCSS), obtains the A1 certificate where one is needed, and keeps the day records. What still has to be settled is how many days at home the role allows, which country they are spent in, and who reports them each month.

Luxembourg withholds income tax through the retenue d’impôt sur les traitements et salaires on salary for work physically performed in Luxembourg, and each treaty tolerates 34 days a calendar year worked elsewhere before the tax on those days moves to the country of residence. All three sit at 34 for 2026, though they arrived there by separate instruments: Belgium from income year 2022, France from 2023 and Germany from 2024, each replacing a lower figure.

The count is not limited to telework: any working day spent outside Luxembourg goes into it, business travel and training abroad included, and the counting rules differ. France treats any fraction of a day as a full day, leaves out paid holiday, rest days, unworked public holidays and sickness, and cuts the 34 days proportionally for part-time employees and mid-year joiners. Germany counts a day only where the activity there lasted at least 30 minutes. No equivalent Belgian rule was confirmed for this article, so count Belgian days conservatively.

Going over is a cliff edge, and France is the expensive case. Once a French resident passes 34 days, every day worked in France is taxable there from the first one rather than from the thirty-fifth, and the salary has to be apportioned. The employer then needs a French SIRET, which takes roughly three to six weeks, and declares the French-taxable portion monthly through PASRAU. For Belgian and German residents the treaties work by exemption with progression, and no equivalent filing duty for a Luxembourg employer was identified, which rests on secondary sources and is worth confirming.

These numbers move by treaty, so a contract should not promise a number of home days without a review clause. Higher thresholds have been discussed between the governments, but as at 20 September 2026 all three still stand at 34. Our guide to cross-border workers in Luxembourg covers the wider frontalier position.

Social security is decided by a share of working time, not by a count of days. Under Regulation (EC) No 883/2004 an employee is insured where the work is physically carried out, so someone working only in Luxembourg is affiliated there for healthcare, pension, accident and long-term care cover whatever their country of residence, and the employer files a déclaration d’entrée with the CCSS within eight days of the start date.

Article 13 of the same regulation changes that as soon as the employee performs a substantial part of the work where they live, defined as 25% or more of working time. The whole employment relationship then moves to that country’s system, and the Luxembourg employer has to register there and pay contributions at local rates on 100% of the pay. One home-working day a week is around 20% and sits below the line; two days is around 40% and crosses it.

The multilateral framework agreement on cross-border telework is what makes two days a week workable. In force since 1 July 2023 and signed by Luxembourg, Belgium, France and Germany, it derogates from the 25% rule under Article 16(1), so habitual telework from the country of residence of 25% up to under 50% of total working time leaves social security in Luxembourg. The conditions are cumulative: an employee rather than a self-employed person, both countries signatories, telework only in the country of residence, no other habitual activity outside Luxembourg, a connection to the employer’s IT systems, and the agreement of both sides.

None of that happens by itself. The employer applies to the CCSS through SECUline, procedure DEMDET, and an A1 certificate is issued for the declared period, capped at three years; since 1 July 2024 a retroactive declaration reaches back only three months. Where nobody files and the employee teleworks 25% or more, Article 13 applies by default and the exposure sits in the residence country. At 50% or more the agreement cannot be used at all.

The practical duty is to count, per employee, and to record where each day was worked rather than assume the pattern held. That means a current work calendar showing the place of work for every working day, from which attestations can be produced. It is the most commonly missed obligation for cross-border staff, and the first thing an administration would ask to see.

The arithmetic catches people out because the two tests use different units. One home-working day a week is about 20% of working time, comfortably inside the social security ceiling, and yet it comes to far more than 34 days across a year. Set the pattern against whichever test binds first, which on a five-day week is almost always the tax tolerance.

A third exposure sits with the employer rather than the employee. A home office abroad used regularly and structurally, at the employer’s disposal and with its use required or controlled by the employer, can raise a permanent establishment question in that country. There is no Luxembourg safe harbour, so keep a workplace available in Luxembourg, record telework as voluntary, and take corporate tax advice before a pattern sets.

Where an EOR is the employer, the filings and the A1 sit with the EOR while the client who directs the work sees the pattern day to day, so agree who reports the days. Our Luxembourg EOR services page sets out that split.

Telework inside Luxembourg runs on one instrument binding every employer and employee in the country: the convention of 20 October 2020 on the legal regime of telework, made generally binding by the grand-ducal regulation of 22 January 2021. It divides telework in two: occasional telework arises from unforeseen events, or averages less than 10% of normal annual working time over the calendar year, and everything above that is regular telework, with heavier formalities.

Telework is agreed, never imposed: an employee cannot require it and an employer cannot compel it. Regular telework needs a written agreement covering the place of telework, the days and hours and when the employee must be reachable, compensation for benefits in kind lost by working at home, a monthly allowance for connection and communication costs, and the procedure for returning to the normal arrangement. Occasional telework needs only written confirmation, and an email meets that. In undertakings with 150 or more employees, introducing or changing a telework regime means informing and consulting the délégation du personnel (staff delegation). Our note on Luxembourg employment contracts covers the wider paperwork.

For regular telework the employer provides the necessary equipment, bears the direct costs including communication, provides technical support, and carries the risk of loss of or damage to equipment and data. What counts as necessary is deliberately left undefined, so list the kit in the agreement rather than argue about it later, and cost coverage may take the form of a monthly lump sum agreed in writing. None of those duties attach to occasional telework.

The tax treatment of that lump sum is where budgets go wrong. Luxembourg sets no fixed tax-free teleworking allowance. A flat monthly telework payment is taxable salary, because the income tax law treats indemnities other than non-flat-rate reimbursements of expenses incurred in the exclusive interest of the employer as pay, and the ACD expects employers to tell employees so. Reimbursing actual, documented expenses is treated differently. Monthly figures circulate as market practice; none is a tax threshold, so budget the allowance as gross pay.

Statutory working time applies to a teleworker in full: 8 hours a day and 40 a week as the norm, 10 and 48 as the maximums, 11 consecutive hours of daily rest in every 24, 44 consecutive hours of weekly rest, and a break on any day longer than 6 hours. Workload and performance criteria must match those of comparable colleagues on site, and the right to disconnect applies in the same way.

Overtime is not at the employer’s discretion in Luxembourg, and home working does not relax that. The employer sends a justified request to the Inspection du travail et des mines (ITM) in advance, with the staff delegation’s opinion or the employee’s consent, and keeps a register of overtime, Sunday and public holiday hours. Compensation defaults to time rather than money: an hour and a half off per overtime hour, with pay at a minimum of 140% of the hourly rate only where time off is impossible. Hours are harder to see at home, which is why the agreement fixes availability.

Health, safety and data duties follow the employee home. The employer informs the teleworker of the company health and safety policy, the teleworker may ask the occupational health service to inspect the place of work, and the employer trains them on the data rules covering company equipment.

Travel is the one place where an expected cost is missing and an unexpected one turns up. Public transport has been free nationwide since 29 February 2020 and remains free in 2026, so a Luxembourg-resident employee needs no commuting subsidy, though first class rail is paid. That free travel covers the Luxembourg network only: a commuter from Belgium, France or Germany travels free from the border onward and pays the foreign operator for the rest. Reimbursing home-to-work travel does not solve it, because the money is taxable salary. Our guide to employing in Luxembourg puts those costs in context.