Meal vouchers in Luxembourg and benefits in kind

Meal vouchers in Luxembourg: what amount is tax-exempt?

Meal vouchers in Luxembourg are exempt from income tax up to EUR 12.20 per voucher as from tax year 2024, against EUR 8.00 previously. The compulsory employee contribution remains set at EUR 2.80, so the maximum face value of a voucher reaches EUR 15, against EUR 10.80 under the former regime.

The increase was announced on 9 June 2023 by the Ministry of Finance and presented by the Luxembourg Inland Revenue in its newsletter of 2 October 2023. It has applied since 1 January 2024 and rests on a grand-ducal regulation implementing article 104, paragraph 3 of the amended income tax law of 4 December 1967.

Three further changes came with the increase, and they matter as much as the amount. The voucher is digitalised: a card replaces the paper booklet, which remained usable until the end of 2024. The number of vouchers that can be used in a single day is capped at five, that is EUR 75 a day. And the permitted use extends to buying groceries, not just a restaurant meal, including after work, at weekends and on public holidays.

The arithmetic that concerns an employer is straightforward: on a EUR 15 voucher, EUR 12.20 is an exempt benefit and EUR 2.80 is borne by the employee. The employer cost per voucher is therefore the face value less the contribution withheld, excluding the issuer's handling fees, which remain an ordinary operating expense.

Why the EUR 2.80 contribution must appear on the payslip

The EUR 2.80 contribution is not an internal convention: it is the condition of the exemption. The favourable regime assumes the employee actually bears that share, which means an identifiable deduction from net pay, voucher by voucher, and not a statement of principle in a staff memo.

This is the most frequent anomaly in the payroll files we take over: the employer hands out EUR 15 vouchers withholding nothing, believing it is granting a more generous benefit. The benefit then becomes a fully taxable salary supplement, and the employee's gain disappears at the Luxembourg Inland Revenue's first assessment.

The payroll mechanics are the same as for other benefits in kind: the benefit is added to the base of the wage tax withholding, then the employee contribution is deducted from net pay. Both lines must coexist on the payslip, without being netted beforehand. Our Luxembourg payroll service sets up both lines when the file is taken over, before the first monthly close.

One last point of form: the issuing and handling fees charged by the voucher operator are not part of the benefit granted to the employee. Charging them against the benefit distorts both the taxable base and the real employer cost.

Which days does a meal voucher attach to?

A meal voucher attaches to a day actually worked, and the Luxembourg Labour Code contains no provision specific to it. The Labour and Mines Inspectorate classifies it as a benefit in kind, hence an element of remuneration, but notes the absence of settled case law on whether it survives periods not worked.

Two Court of Appeal decisions are cited by the Labour and Mines Inspectorate in its questions and answers. A 2015 judgment held that the voucher is intended to allow a main meal to be taken during a working day, which rules out granting it during periods of inactivity, leave and maternity leave included. A judgment of 9 February 2017 rejected a claim covering periods of incapacity for work, on the ground that the voucher amounts to a reimbursement of costs incurred at work rather than a salary item due every month.

That reading remains open to argument, and the Labour and Mines Inspectorate says so itself: absent confirmed case law, granting vouchers during sick leave can be disputed either way. The practical consequence is that a clause in the employment contract or in a collective agreement expressly providing for continuation prevails over market practice.

During maternity leave the question arises differently: the employee no longer receives salary or benefits in kind, which are replaced by the maternity allowance. A company that keeps crediting vouchers over that period creates a benefit without a basis, to be corrected.

For a director weighing this up, the real issue is not the monthly cost but the written rule. We regularly see internal policies silent on absences, which leave the payroll officer with a decision that is not theirs to make, and which surfaces at the first end-of-contract dispute.

How is a housing benefit valued in Luxembourg?

A housing benefit granted to an employee in Luxembourg is in principle valued at the usual average price of the place and time, under article 104, paragraph 2 of the income tax law. Failing comparable accommodation, circular L.I.R. no. 104/1 of 16 July 2018 allows a flat-rate valuation based on the unit value of the property.

Within that flat-rate framework, the monthly value of the benefit is set at 25 percent of the unit value of the accommodation, without being less than three-quarters of the rent excluding charges paid by the employer where the employer is the tenant. If the accommodation is furnished, the value so determined is increased by 10 percent. And if the employee reimburses part of the rent, that contribution is deducted from the benefit.

The order of these rules is often reversed in practice. The flat rate is subsidiary only: it applies not because it is more convenient, but because no comparable accommodation allows the primary rule of article 104, paragraph 2 to be applied. An employer renting a flat on the market for an employee has precisely a market price, and whether the flat rate remains available is worth putting to the competent wage tax office before the first payroll run, not after an audit.

The same logic governs the other benefits with no published flat value, such as a phone, an internet subscription or mixed-use IT equipment: valuation follows the usual price, documented by the invoice, not a percentage borrowed by analogy from another country. Article 104, paragraph 2 is a valuation rule, not a tolerance.

Are benefits in kind part of the social security contribution base?

Most are; the meal voucher is not. Article 34 of the Social Security Code brings into the contribution base the bonuses, profit shares and other benefits, even where not expressed in cash, that the insured person enjoys by reason of their occupation, remuneration in kind being accounted for at the value set under article 104, paragraph 3 of the income tax law.

The link is therefore direct: the flat value used for tax becomes the value used for contributions, with no second computation. That is why a valuation error on a benefit in kind feeds mechanically into two bases and two returns, the wage tax withholding return and the Joint Social Security Centre declaration.

The grand-ducal regulation of 16 December 2008 sets out the exclusions. Outside the contribution base are the savings and interest subsidy granted by the employer, the meal allowance granted in the public sector, and analogous forms of remuneration in the private sector, the category the meal voucher falls into.

The practical outcome is worth stating plainly, because it is counter-intuitive for an employer used to another system: the meal voucher is a benefit in kind under labour law, exempt from tax up to EUR 12.20, and outside the contribution base. The company car, by contrast, sits in both bases, under the grid set out in our article on the company car benefit in kind.

How are benefits in kind reported and recorded?

Reporting a benefit in kind in Luxembourg runs through payroll, not through a year-end entry. The benefit is incorporated into the gross remuneration of the month in which it is granted, feeds the base of the wage tax the employer withholds on the employee's account, and appears on the annual remuneration certificate.

On the accounting side, the expense follows its nature rather than its payroll classification. The purchase of meal vouchers, the rent paid to the landlord of the accommodation provided, the phone subscription: each is recorded at its invoiced amount under staff costs or external charges according to the standard chart of accounts, and the share borne by the employee reduces the net remuneration payable rather than creating income.

The closing control point is the absence of any gap between three sets of figures: the invoices from the voucher operator or the landlord, the benefits run through payroll, and the amounts declared to the Joint Social Security Centre. A persistent gap almost always signals a benefit distributed outside payroll, which is the costliest exposure in an audit.

Annual contribution ceilings and rates change every year: we keep them current in our article on Luxembourg social parameters, which serves as the configuration reference for the payroll files we run.

The errors we correct most often

On benefits in kind other than vehicles, payroll files we take over show a set of errors that is stable from one year to the next, and none of them turns on a legal subtlety.

The EUR 2.80 contribution not withheld, already described: the first item to correct, because it reclassifies the whole voucher as taxable remuneration.

Vouchers credited during leave or absence, with no contractual clause justifying it and no written decision on the point.

A housing benefit valued on the rent paid without checking the three-quarters floor, or the reverse, a flat rate applied where a market price is available.

Benefits valued but never declared to the Joint Social Security Centre, because the payroll setup treats the line as exempt in both bases instead of one.

Reworking a history of that kind means going back to employment contracts, voucher operator invoices and leases, employee by employee, then correcting the open returns. It is a documentary exercise before it is a configuration exercise; our engagement terms are set out on the pricing page.

Sources and verification

Written for Financial Services Luxembourg and reviewed before publication by Mickaël LOC, licensed accountant (authorisation 10077274). Sources were verified on 1 October 2026, the date on which every amount, threshold and legal reference cited here was cross-checked against an official source.

The sources consulted are as follows.

The Luxembourg Inland Revenue, for its newsletter of 2 October 2023 (exemption raised from EUR 8.00 to EUR 12.20 as from tax year 2024, employee contribution maintained at EUR 2.80, voucher value raised to EUR 15, digitalisation and extension to grocery purchases), its A to Z page on benefits in kind, and circulars L.I.R. no. 104/1 of 16 July 2018 and no. 104/1bis of 4 February 2020 (valuation at the usual average price under article 104, paragraph 2, subsidiary character of the flat rate, 25 percent of the unit value, floor of three-quarters of the rent excluding charges, 10 percent increase for furnished accommodation, deduction of the employee's contribution).

The Ministry of Finance and gouvernement.lu, for the press release and factsheet of 9 June 2023 (entry into force on 1 January 2024, maximum of five vouchers a day, that is EUR 75, use after work, at weekends and on public holidays, paper booklets usable until the end of 2024).

The secu.lu portal, for articles 33 to 35 of the Social Security Code (contribution base, benefits even where not expressed in cash, reference to the value set under article 104, paragraph 3) and the grand-ducal regulation of 16 December 2008 (exclusion of savings and interest subsidy, of the public sector meal allowance and of its analogous private sector forms). The Labour and Mines Inspectorate, for its questions and answers D4b1 on the notion of benefit in kind, D4b8 on sick leave and D4b9 on holidays, which cite the Court of Appeal judgments of 2015 and of 9 February 2017 and note the absence of confirmed case law.

Three points could not be verified in their primary source and are therefore not asserted here.

The full text of the grand-ducal regulation implementing article 104, paragraph 3 in the version applicable since 2024: legilux.public.lu and impotsdirects.public.lu are blocked by the network proxy of our editorial environment, and these documents were read through indexed extracts via a search restricted to official domains; we therefore attribute the increase to the Luxembourg Inland Revenue newsletter rather than to a regulation number, which an indexed extract dates to 25 September 2023 without our being able to confirm it.

The floor per square metre of living area provided by circular no. 104/1 for accommodation owned by the employer, which an indexed extract puts at EUR 8: the amount is not carried into the table for want of reading the full text. And the flat values for food provided free of charge, distinct from travel meal allowances, which we could not isolate. These three points can be checked in the consolidated regulation on legilux.public.lu, in circular no. 104/1 on impotsdirects.public.lu and with the competent wage tax office.

This article states the law as it stands at the date of publication and is not personalised advice: the applicable treatment depends on the employment contract, on any collective agreement, on the exact nature of the benefit and on its documentation. Report an error to contact@financialservices.lu: corrections are dated in the article.