Workers and pensioners in Luxembourg will benefit from a new wage indexation in a few weeks' time. This mechanism has led to a significant increase in incomes overall.

The imminent arrival of the 3rd wage indexation of the year signals promising news for employees and pensioners. As confirmed by the National Institute of Statistics and Economic Studies (STATEC) on Tuesday, projections are aligning, setting the stage for the wage indexation to be applied to September or October salaries. The result: a substantial 2.5% surge in salaries and pensions across Luxembourg.

Indeed, the consequences of this 3rd wage indexation are evident in tangible financial shifts. According to STATEC's calculations, salaries and pensions are set to experience a cumulative growth of approximately +7.7% within the current year alone.

The momentum is expected to extend into 2024, with another wage indexation slated for implementation in the third quarter of the year. But wage indexations are also inherently linked to price rises: The report affirms STATEC's projections, sustaining an average inflation estimate of 3.9% for 2023 and 2.5% for 2024.

The wage indexation's influence is notably contributing to the increase in service prices. STATEC's records reflect a 2.9% increase in service prices during both July 2022 and July 2023 — a trend deemed "relatively contained" despite the two wage indexations earlier in the year. But the upward trajectory remains intact.

After the last tripartite meeting, the government committed to tax reductions. This initiative commenced in July, bolstered by the business tax credit, and will continue into early 2024.

Calculate the effect of the wage indexation on your gross salary: