Notice period in Luxembourg: 2, 4 or 6 months

What is the notice period in Luxembourg?

The notice period in Luxembourg is two months for an employee with less than five years of continuous service, four months between five and less than ten years, and six months from ten years, under article L. 124-3 of the Labour Code; a collective agreement or the contract may grant more, never less.

The scale is short, but it carries two reading rules that payroll files often miss. The first is the measurement date: the Inspection du travail et des mines states that length of service is measured on the day of the dismissal, meaning the day of notification, and not at the expiry of the notice period. An employee who would reach five years during the notice therefore stays on two months.

The second is the rigidity of the deadline. Guichet.lu specifies that the end of the notice period cannot be extended by illness, accident or leave: once the term is set, it does not move, even if the employee is absent for almost the whole period. That is what makes the starting point decisive.

Notice on resignation follows the same bands, halved: one month under five years, two months between five and less than ten years, three months from ten years. The table puts both scales side by side, because it is that comparison which is missing from most internal rules we review.

When does the notice period start and when does it end?

In Luxembourg, a notice period never starts the day after the letter: it runs from the 15th of the current month if the registered letter is sent before the 15th, and from the 1st of the following month if it is sent between the 15th and the end of the month. Only two starting dates therefore exist in the calendar.

The consequence is arithmetical. A letter posted on the 14th starts a two-month notice on the 15th of the same month; the same letter posted on the 16th, two days later, starts it on the 1st of the following month and pushes the end of contract back by more than two weeks. On a fully loaded salary, those two weeks are not a rounding difference: they show up in payroll and in the year-end accrual.

On the date which actually triggers the deadline, official sources are not perfectly aligned. Guichet.lu takes the date the letter was sent, whatever the date of receipt. The Inspection du travail et des mines, in its question and answer D11a13, recalls that a 2001 Court of Appeal ruling introduced the receipt theory, while noting that the majority of case law takes the sending date instead. The two converge as soon as sending and receipt fall on the same side of the 15th; they diverge on a letter posted on the 13th and received on the 16th, which is exactly the envelope not to post on a Friday the 13th.

We regularly see end dates aligned on a month end, because the payroll calendar runs in calendar months. That is not the law: the notice ends on the 14th or on the last day of the month, and a final payslip built on another date ends up inconsistent with the exit declaration filed with the Centre commun de la sécurité sociale. Reworking one file costs an hour; a wave of departures at year-end costs far more.

Who is entitled to severance pay in Luxembourg, and how much?

Severance pay is due to an employee dismissed with notice who has at least five years of continuous service with the same employer. It ranges from one month's salary at five years of service to twelve months from thirty years, under the scale in article L. 124-7 of the Labour Code, and a collective agreement may provide better terms.

The rule that decides the file is not the scale but the date on which it is read. The Inspection du travail et des mines specifies that the length of service giving entitlement to severance pay is measured at the expiry of the statutory notice period, not on the day of the dismissal as it is for the notice itself. The two counters are therefore offset: an employee notified at four years and ten months has two months of notice, and crosses the five-year mark when it expires.

They do not get four months of notice, but they are entitled to one month of severance pay. We regularly see the error made in both directions, all the more expensive because it surfaces after the employee has left.

The calculation base follows its own logic, also set by the Labour Code: severance pay is computed on the gross salaries actually paid over the twelve months immediately preceding the month in which the dismissal was notified. Overtime pay and gratuities are excluded from that base. Three reference periods therefore coexist in a single file: the twelve months before notification for severance pay, the three months before the leave for the untaken leave indemnity, and the exit month for the final payslip.

On tax, the Administration des contributions directes classes severance pay among the exemptions of article 115, 9° of the income tax law: statutory or collectively agreed severance pay is fully exempt from income tax, with no prior formality, the employer applying the exemption in the withholding. The Inspection du travail et des mines adds that it is subject neither to income tax nor to social security contributions.

That regime must be distinguished from the one applying to other termination payments, in particular compensation for unfair dismissal, which is exempt only up to a ceiling set at twelve times the minimum social wage for unskilled workers on 1 January of the tax year: the amount of that ceiling therefore depends on the year, and our article on the Luxembourg minimum wage sets out the basis for computing it.

Can an employer with fewer than 20 staff extend the notice instead of paying?

Yes: an employer with fewer than twenty employees may, under article L. 124-7 (2) of the Labour Code, choose between paying severance and extending the notice period, raised to five months from five years of service and up to eighteen months from thirty years. That choice must be exercised in the dismissal letter itself.

In our practice, this is the provision most often discovered too late. The option cannot be settled while preparing the final payslip: the dismissal letter must carry the intention, and a silent letter leaves severance pay due under the statutory scale. It is a decision to take before posting the envelope, not after.

The two branches do not cost the same. Severance pay goes out once, exempt from tax and contributions for its statutory part, and the position is freed at the end of the normal notice. Extended notice keeps the contract alive, and with it the salary, employer contributions, leave accrual and the base for benefits, for up to eighteen months. It becomes attractive when the position must still be staffed through a transition; it becomes heavy when the relationship is over and the employee will be released from duties anyway.

The twenty-employee threshold is worth checking at the right moment rather than assumed, particularly in a growing structure: a company that has crossed the threshold loses the option, and a dismissal letter drafted on last year's template then becomes inaccurate. The headcount tracking that feeds payroll is the right place to keep that counter.

Release from duties, leave and job-search time during the notice

During the notice period, the employer may release the employee from all work duties: that release counts as effective working time, salary remains due, leave keeps accruing, and the released employee loses the right to job-search leave, which is reserved for those who actually work their notice.

Job-search leave is capped at six working days for the whole notice period, fully paid and divisible by the hour or by half-day. Guichet.lu specifies that the employee must request it, that the employer may in principle refuse only for compelling operational reasons, that the employee must show they attended a job opportunity, and that it cannot be placed at the end of the notice to lengthen it.

The leave balance is the point most often mishandled, and the law is clear on both questions that arise. First, the Inspection du travail et des mines states in its question and answer D8k3 that the employer cannot force the employee to take the leave balance during the notice: the employee may opt for payment of an indemnity for untaken leave.

Second, where the employee is released from duties, question and answer D8k4 specifies that the notice period must be taken into account in computing the leave indemnity due, even though the employee did not work. In other words, releasing someone from duties does not save the leave: it turns it into an indemnity.

The gap with management intuition is systematic: many directors reason as if release from duties cleared the leave counter and closed the file. It does the opposite, running both the notice salary and the leave accrual, whose balance will have to be paid out. The detail of how leave is counted, in working days rather than worked days, is set out in our article on annual leave and public holidays.

One last calendar point: an employee unfit for work who has complied with their information duties, notice on the first day and a medical certificate within the deadlines, is protected against dismissal for the duration of the incapacity, up to twenty-six weeks from the start of the absence. Guichet.lu states that, during that period, the employer may neither dismiss with notice nor convene the employee to a preliminary interview with a view to such a dismissal. An envelope posted during the protection therefore achieves nothing.

Which procedure and deadlines frame a dismissal with notice?

The procedure for dismissal with notice rests on four deadlines that must be held together: the preliminary interview, mandatory for employers with one hundred and fifty staff or more, notification by registered letter, the month in which the employee may ask for the reasons, and the month the employer has to state them precisely.

The preliminary interview concerns employers with at least one hundred and fifty employees, and the threshold is measured on the day the employer decides to start the procedure. The convocation must state the purpose, the date, the time and the place, together with the employee's right to be assisted.

The interview may be held no earlier than the second worked working day after the convocation was sent, and the dismissal is notified no earlier than the day after the interview and no later than eight days after it. Failure to follow this procedure entitles the employee to an indemnity of one month's salary, which cannot be combined with damages for unfair dismissal.

The statement of reasons follows a double one-month deadline that must be read in the right order. The employee has one month from the notification to request the reasons by registered letter, and Guichet.lu provides a model letter based on article L. 124-5 of the Labour Code. The employer must then state the real and serious reasons precisely, by registered letter, no later than one month after receiving the request.

Absent a written statement within that deadline, the Inspection du travail et des mines states that the dismissal is unfair and the employee may claim damages: silence is not a defensive strategy, it is a qualification handed to the employee.

The deadline for court action completes the framework. The Inspection du travail et des mines recalls, in its question and answer D11a24, that an action against an unfair dismissal is subject to a three-month limitation period, running from the notification of the dismissal or, where the employer replied within the statutory deadline, from the statement of reasons; where it did not reply, it runs from the expiry of the one-month deadline. An employee who did not ask for the reasons is nonetheless not deprived of the right to prove that the dismissal was unfair.

The table below places these deadlines on a single axis: two of them run after the end of the contract, when the payroll file is already closed.

What payroll and year-end closing must record on departure

On departure, three obligations are triggered on different calendars: the exit declaration to the Centre commun de la sécurité sociale within eight days of the end of the contract, the issue of a certificate of employment if the employee asks for one, and the allocation to the right financial year of the notice and severance cost already committed at the balance sheet date.

The exit declaration is filed through SECUline, through MyGuichet.lu or on a form, and the date to declare is the day the employment relationship ends, meaning the last day of the statutory notice period, not the last day actually worked where the employee was released from duties.

Two points avoid common errors: no declaration is due while the absence is still being indemnified by a health fund, and Guichet.lu puts the penalty for late filing beyond the applicable tolerance at fifty euros per month, capped at two thousand five hundred euros. The notice end date must therefore be right from the first calculation: it feeds both the final payslip and the declaration.

The certificate of employment is not automatic but it is a right. Article L. 125-6 of the Labour Code requires the employer to issue it on expiry of the contract if the employee requests it; the Inspection du travail et des mines specifies that, on a refusal, the employee may give formal notice by registered letter to issue it within eight days, then apply to the judge in summary proceedings, with a penalty payment if needed. Refusing merely moves the cost.

On the closing side, the reflex is the same as for the leave balance: a termination notified before the balance sheet date commits a cost of the financial year just ended, even though the notice expires and the severance is paid in the following one. Quantifying it requires the exact notice end date, the twelve-month base preceding the notification, the leave balance to be paid out and, where relevant, the choice of the extended-notice option. It is that allocation work which makes annual accounts comparable from one year to the next.

In an outsourced payroll file, this sequence fits into the monthly routine: the letter is dated with the 15th in mind, the leave counter is up to date, and the year-end accrual follows from the file at the payslip price published in our pricing grid. We regularly see the opposite: a letter posted on the 16th without intent, an article L. 124-7 (2) option never exercised because it was not known in time, and an accrual rebuilt once the final payslip has already gone out.

Sources and verification

Written for Financial Services Luxembourg and reviewed before publication by Mickaël LOC, licensed accountant (authorisation 10077274). Sources verified on 10 October 2026: every duration, deadline, amount and legal reference in this article was checked against an official Luxembourg source that day, and no figure was taken from memory.

The sources consulted are, for the duration of the notice period and its starting point, article L. 124-3 of the Labour Code on Legilux, the Guichet.lu page on dismissal with notice for businesses, and questions and answers D11a12 and D11a13 of the Inspection du travail et des mines; for notice on resignation, article L. 124-4 and question and answer D11e3; for severance pay, its scale, the date on which length of service is measured and its calculation base, article L. 124-7 and questions and answers D11a20, D11a21 and D11a22; for the extended-notice option reserved for employers with fewer than twenty staff, article L.

124-7 (2) and the table on the Guichet.lu page on dismissal with notice; for the tax treatment, the Licenciement page of the A to Z index of the Administration des contributions directes, which attaches statutory or collectively agreed severance pay to article 115, 9° of the income tax law, and the Guichet.lu page on applying for tax exemption of payments made on termination of an employment contract for the ceiling applying to other payments; for release from duties, job-search leave and the leave balance, the Guichet.lu page on leave to look for a new job and questions and answers D8k3 and D8k4;

for protection during incapacity for work, the Guichet.lu page on dismissal with notice; for the preliminary interview, question and answer D11a2 and the Chambre des salariés note on dismissal; for the request and the statement of reasons and for the limitation period, article L. 124-5, the Guichet.lu page on requesting the reasons for a dismissal with notice together with its model letter, and questions and answers D11a9 and D11a24; for the exit declaration and its penalty, the pages of the Centre commun de la sécurité sociale and the Guichet.lu page on fines for late entry or exit declarations to the CCSS; for the certificate of employment, article L.

125-6 and question and answer D11m1. All of these were consulted on 10 October 2026.

Two points could not be verified on an official source and are therefore not quantified here. The first is the euro amount of the ceiling of twelve times the unskilled minimum social wage on 1 January 2026, which governs the exemption of termination payments other than severance pay: the minimum social wage published at the time of writing is the one applicable from 1 June 2026, and the value applicable on 1 January of the tax year could not be confirmed the same day.

The second is the standard chart of accounts item to use for the notice and severance accrual at the balance sheet date: the search found neither a Luxembourg Business Registers instruction nor a Commission des normes comptables opinion dealing explicitly with that allocation, and the text confines itself to the principle of matching the cost to the right year. A reader who wants to check these two points will find the consolidated Labour Code and the standard chart of accounts on Legilux and the social parameters on the Centre commun de la sécurité sociale website, and may put a written question to the Inspection du travail et des mines.

Two methodological reservations should be added: several of the questions and answers cited here rely on case law that may evolve, in particular on which notification date starts the notice period, and a sectoral collective agreement may provide for a longer notice, a more favourable indemnity or different entitlement conditions.

This article sets out the state of the law at the date of publication and does not constitute personalised advice: an individual situation, an applicable collective agreement or internal rules may alter its consequences. Report an error to contact@financialservices.lu: the correction is dated in the article.