Meal vouchers or salary increases in Luxembourg: which solution is more advantageous ?
Key takeaway: Meal vouchers in Luxembourg offer up to €3,000 in additional purchasing power per employee, while reducing employer costs by around €10,000 per year.
When a company wants to increase its employees’ purchasing power, it has two options:
- grant a gross salary increase, or
- introduce meal vouchers.
At first glance, the increase seems simpler. But in practice, meal vouchers prove to be much more advantageous, both for the company and for the employee.
1. Gross increase: a heavy cost for the employer
Let’s take the example of a Luxembourg company that grants an additional €270 gross per month to each of its employees.
- Annual employer cost (10 employees): €36,240
- Total net gain for employees: ≈ €23,000/year
Why such a difference ?
Because the gross increase is subject to:
- social security contributions,
- income tax,
- and automatic wage indexation, which increases the employer’s burden with each adjustment.
📌 Result: the employer pays more, but the employee receives less net purchasing power.
2. Meal vouchers: a concrete lever for purchasing power in Luxembourg
With 18 meal vouchers worth €15 per month (face value: €270), the scheme changes everything:
- Annual employer cost (10 employees): €26,352
- Total net purchasing power for employees: ≈ €26,352/year
- Employer savings: nearly €10,000/year
Luxembourg meal vouchers are:
- exempt from tax and social security contributions (up to €12.20 per share),
- not subject to indexation,
- easy to manage with digital solutions such as those offered by Up Luxembourg.
💡 In other words, it is the most effective way to increase purchasing power without increasing payroll costs.
3. Practical cases according to company profile
SMEs and Freelancers
For small businesses, every dollar counts. Meal vouchers offer an attractive employee benefit without impacting fixed costs or increasing administrative overhead.
Large Companies
For large groups, the scale effect is spectacular. A meal voucher program for 100 employees can generate nearly €100,000 in annual savings compared to a gross increase.
Employers with Cross-border workers
Cross-border workers also benefit from the scheme. It is a major attraction for retaining and recruiting staff in the face of cross-border competition.