Business permit, VAT at 8% or 17%, a mandatory sector agreement and a cost that sits almost entirely in payroll: what an owner needs to know to avoid working at a loss.

In short. A cleaning company in Luxembourg needs a business permit before it can start, but its real difficulty is neither administrative nor tax-related: it is labour. Staff make up the bulk of the cost, the sector is governed by a collective agreement that is legally binding on all employers, and VAT changes depending on whether you clean offices (17%) or private homes (8%). Monthly bookkeeping, payroll included, is not a luxury in this low-margin trade: it is what tells you whether a contract makes or loses money. At Advena, that bookkeeping starts from €325 per month, all in.

Starting a cleaning company appeals for good reasons: little start-up capital, steady demand from offices, shops and households, an accessible entry ticket. What people gauge less well before they jump in is that the accounting of a cleaning company looks nothing like that of an ordinary shop. Almost your entire cost sits on a single line, wages, and that is where your survival is decided. Here, without detours, is what an owner needs to know to keep the books straight and avoid working at a loss. The regulatory points below are current as at August 2026.

First, the business permit

Like almost any economic activity carried out on a regular basis, building cleaning requires a business permit before the first job. For this type of activity, the central requirement is not a diploma: it is the director's professional integrity and a real establishment in Luxembourg, not a mere letterbox. Depending on the precise classification of the activity, no specific qualification is imposed in most cases, but integrity is always checked. The application is made online on MyGuichet.lu, costs €50 in chancellery fees, and the administration answers in principle within three months. We set out the whole procedure, the conditions and the documents in our guide to the business permit in Luxembourg.

The useful instinct: launch this application early, alongside forming the company and the initial VAT declaration, rather than discovering it as a last-minute blocker when you are about to sign your first cleaning contract.

Cleaning VAT: 8% for households, 17% for offices

This is the subtlety most owners miss, and it feeds straight into your pricing. A cleaning service does not fall under a single rate.

What you invoiceVAT rate
Cleaning of offices, shops, commercial premises, work sites17%
Cleaning carried out in private households (a private individual's home)8%
Sale of cleaning products and detergents on their own14%

Put plainly, the office block you clean in the morning is invoiced at the standard rate of 17%, while the private flat you maintain in the afternoon falls under the 8% reduced rate reserved for cleaning in private households. A company that serves both types of client therefore has to split its invoicing by rate, otherwise it collects the wrong VAT, to its own disadvantage either way. The full picture of the four Luxembourg rates and their edge cases is in our article on VAT rates in Luxembourg in 2026.

Your real cost centre is labour

In cleaning, the raw material is human. Consumables, equipment and vehicles weigh little next to the wage bill, which commonly runs to 70% or 80% of turnover. That changes everything in how you keep the books: your margin is not made on a well-negotiated purchase, it is made on the minute of labour billed.

The starting point is the minimum wage. Since 1 June 2026 and index 992.24, it stands at €2,771.33 gross per month for an unskilled worker, or €16.0192 an hour. Adding employer contributions, such a post costs the employer between €3,122 and €3,181 a month depending on its mutual insurance class. We work through that calculation, charge by charge, in our article on what an employee really costs in Luxembourg in 2026.

But the gross hourly rate is not enough to work out your cost price. A full-time employee is entitled to at least 26 days of annual leave and to statutory public holidays: the hourly cost actually worked is therefore noticeably higher than the headline gross hourly rate. Add accident insurance, borne entirely by the employer and far from trivial in a physical trade, and you see why a cleaning company that bills its hours at the minimum gross rate works at a loss without noticing. The selling price of a cleaning hour has to cover the loaded hourly cost, downtime, travel, consumables and a margin, not just the wage.

The cleaning sector agreement is binding on you

This is the most common compliance trap in the trade. Building cleaning is covered by a collective bargaining agreement that has been declared generally binding. In force since 1 May 2025 for three years, until 30 April 2028, it was made mandatory by a Grand Ducal regulation of 16 October 2025, supplemented by an amendment of 21 January 2026. "Generally binding" has a very concrete meaning: the agreement applies to every employer in the sector, whether or not you belong to an employers' organisation, from your first employee.

The direct consequence for your payroll: the real wage floor is not the statutory minimum wage but the scales set by the agreement, generally more favourable, together with premiums for night work, Sunday work and public holidays, all common in a trade where offices are cleaned before or after opening hours. Producing payslips while ignoring these rules means building up a social liability that surfaces at the first inspection by the Labour and Mines Inspectorate or the first dispute with an employee. Payroll handled by someone who knows the sector agreement is not a detail: it is insurance.

Setting up or taking over a cleaning company and want payroll, VAT and accounting secured from the first employee? We map it out with you.

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Invoicing, collection and cash flow

Cleaning lives on recurring contracts: a monthly amount for a regular service, sometimes topped up with one-off jobs such as a deep clean or an end-of-site clean. That recurrence is a strength, provided you invoice on time and collect on time. Two accounting habits make the difference.

First: invoice monthly subscriptions automatically rather than by hand, so you never forget a regular service or delay a collection. Second: watch your unpaid invoices closely, because your cash position is fragile when 75% of your costs fall as wages on the 1st of the month while your clients pay you at 30 or 60 days. A B2B client who runs three weeks late on an invoice, in a low-margin activity, is a month of wages you are advancing out of your own cash.

Analytic tracking by contract is the other tool that saves a cleaning company: knowing, contract by contract, how many hours were actually spent against the amount invoiced. It is the only way to spot the underpriced job that costs you money every month, and to renegotiate it before it drags the year down.

Keeping the books without losing your nights

The owner of a cleaning company spends their days on site, not in a spreadsheet. That is precisely why bookkeeping kept monthly, rather than discovered at year-end, matters more here than elsewhere: in a low-margin trade, eight months behind on your figures is eight months spent not knowing whether you are making or losing money.

At Advena, we keep your books in the Odoo we configure for the PCN 2020 chart of accounts, Luxembourg VAT and the FAIA export. Payroll is part of the fixed fee: we produce the payslips in line with the sector agreement, handle the filings with the Joint Social Security Centre, and this month's wage bill flows straight into the accounts, with no double entry. Your client subscriptions are invoiced automatically, your bank feeds fill the accounts continuously, and you read your margin by contract in real time, not next spring. This is the principle of real-time bookkeeping, applied to a trade where every hour counts. All from €325 per month, all in, with no invoice outside the monthly fee.

Who this model is not for

Let us be plain. Our fixed fee and our real-time model are built for a Luxembourg cleaning company of 1 to 50 employees that wants to steer its margin and stay clean on payroll. If you are starting out on your own, with no staff, a handful of private clients and very few documents, lighter support will probably do at first. And if you run several hundred payslips a month across several agreements, a specialist payroll bureau will serve you better on the payroll side alone. We will say so at the first meeting rather than partway through. This article informs on the rules in force; it does not replace an analysis of your situation or legal advice on your particular case.

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Frequently asked questions

Do you need a permit to open a cleaning company in Luxembourg?

Yes. Building cleaning requires a business permit, issued by the Ministry of the Economy. The central condition is the director's professional integrity and a real establishment in Luxembourg. The application is made on MyGuichet.lu and costs €50 in chancellery fees.

Which VAT rate applies to cleaning in Luxembourg?

Cleaning of commercial premises, offices and shops falls under the standard rate of 17%. Cleaning carried out in private households benefits from the 8% reduced rate. A company that serves both types of client has to split its invoicing by rate.

Does a cleaning company have to apply a collective agreement?

Yes. The building-cleaning sector is covered by a collective agreement declared generally binding, in force from 1 May 2025 to 30 April 2028. It applies to every employer in the sector, whether or not they belong to an employers' organisation, and sets scales and premiums that the statutory minimum wage alone does not reflect.

How much does an employee cost in cleaning in Luxembourg?

At the unskilled minimum wage of €2,771.33 gross per month, in force since 1 June 2026, employer cost runs between €3,122 and €3,181 a month depending on the mutual insurance class, before leave, agreement premiums and incidental expenses. The hourly cost actually worked is higher than the gross hourly rate, because of leave and public holidays.

How do you know whether a cleaning contract is profitable?

By tracking the hours actually spent per contract against the amount invoiced, through analytic tracking. It is the only way to spot an underpriced contract and renegotiate it before it weighs on the year. Bookkeeping kept monthly makes that tracking possible on a continuous basis.

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Why Advena?

We are the Luxembourg accounting firm that keeps your books inside the management tool it deployed for you. For a cleaning company, that means payroll in line with the sector agreement, client subscriptions invoiced automatically and a margin tracked contract by contract, all on a fee agreed up front from €325 per month, with a named account manager and no surprise invoice. We inform on the rules and point you to specialist advice when your file calls for it.

Tell us where you stand, we tell you what it costs. No phantom quote.

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