Financing meal vouchers in Luxembourg: which method should you choose ?
Meal vouchers are now one of the most popular employee benefits in Luxembourg. But for employers, one question always arises: what is the most advantageous method of financing meal vouchers ?
In Luxembourg, there are two main options: benefits in kind and net deduction. Each has its own tax implications, impact on employee purchasing power, and cost to the company.
In this article, we compare the two methods, with figures to help you make the right choice.
1. Benefit in kind: 100% paid by the employer
With this method, the employer fully finances the face value of the meal vouchers.
- Face value: 18 checks × $15 = $270/month
- Employee contribution: $0
- Taxable amount: €50.40/month
- Employee’s net purchasing power: ≈ €270/month (after tax on €50.40)
- Employer’s cost: €270/month
👉 In practical terms, the employee receives the equivalent of the total value in meal vouchers, but a small portion is considered taxable. For the employer, this is the most expensive and least tax-efficient method of financing meal vouchers in Luxembourg.
2. Net deduction: the most economical and optimized option
In this case, the employee contributes €2.80 per check, or €50.40 per month.
- Face value: 18 checks × €15 = €270/month
- Employee contribution: €50.40/month
- Taxable amount: €0
- Employee’s net purchasing power: €219.60 net/month (exempt from tax and social security contributions)
- Employer cost: €219.60/month
👉 The net deduction allows the employer to save more than 18% compared to the benefit in kind, without negatively impacting the employee.
3. Which method of financing meal vouchers in Luxembourg is the most advantageous ?
The comparison is clear: