All you need to know about offering lunch vouchers to your employees

Lunch vouchers are a highly valued extra-legal benefit in Luxembourg, offering employees tax-free financial support for their daily food expenses. With recent changes to Luxembourg's lunch voucher legislation, it is crucial for employers and employees to understand the new regulations in order to maximize benefits while remaining compliant with current legislation.

Grant lunch vouchers

What is a lunch voucher?

A lunch voucher is a payment solution, now in digital format, provided by employers to their employees. It is intended to cover all or part of lunch expenses during working days. Accepted in a wide range of restaurants, supermarkets and other food establishments in Luxembourg, lunch vouchers contribute to employees' well-being by increasing their purchasing power.

Legislative changes since January 1, 2024

Increase in the maximum tax-exempt amount

From tax year 2024, the maximum amount of the tax-exempt lunch voucher has been increased from 10.80 eur to 15 eur. This change is stipulated in the Grand Ducal Regulation of September 25, 2023, designed to adapt the limit to reflect changes in the cost of living.

What this means:

  • For employees : A direct increase in daily purchasing power.
  • For employers : The opportunity to offer a more substantial incentive while benefiting from exemptions on the employer's share of social security contributions.

Transition to digital format

The same regulation introduces a transition to lunch vouchers in digital format:

Mandatory digital format : Lunch vouchers must be issued in digital format, valid for twelve months.

Transition period : By derogation, the granting of lunch vouchers in paper format remains permitted until December 31, 2024. After this date, only electronic digital lunch vouchers will be valid.

Advantages of the digital format :

Traceability and security: Transactions are automatically recorded, reducing the risk of loss or fraud.

Convenience: Easy to use for employees and affiliates (restaurants, food shops).

Legal framework for lunch vouchers in Luxembourg

Issuing conditions

  • Maximum amount: The lunch voucher can now be up to 15 euros per working day, tax-free.
  • Employer and employee contributions : The employer finances the majority of the lunch voucher, while the employee contributes the remainder. The employer's share is exempt from taxes and social security contributions up to the set limit.
  • Employee participation :
    • With participation : If the employee contributes 2.80 eur and the employer 12.20 eur, the total of 15 euros is exempt for both parties.
    • Without participation : If the employer pays the full 15 eur face value of the lunch vouchers, the 2.80 eur portion is taxable for the employee as a benefit in kind.

Number of lunch vouchers per person

Per working day: A maximum of one lunch voucher per working day.

Annual calculation :

  • 52 weeks x 5 working days = 260 days
  • -26 days of vacation
  • -11 public holidays
  • -5 fixed-rate days (absences or banking agreement)
  • = 218 days worked per year

Monthly distribution : 218 days/ 12 months≈ 18 lunch vouchers per month

Tax and social benefits

Lunch vouchers offer benefits for both employers and employees:

For employers :

  • Tax deductibility : Contributions are deductible from operating expenses.
  • Exemption from social security contributions : No social security charges on the employer's share of lunch vouchers.

For employees :

  • Increased purchasing power : Increase in purchasing power without impact on the tax base, subject to conditions.

Imposition :

  • With employee participation: No additional taxation.
  • Without employee participation : The 2.80 eur share is taxable as salary.

Accounting deduction for employers

  • Total tax deductibility : Lunch vouchers are fully deductible as operating expenses.
  • Exemption from social charges : No social security charges are applied to the employer's portion of the lunch voucher.

Use of lunch vouchers

Permitted uses: For the purchase of ready-to-eat lunches or food products from affiliates in Luxembourg.

Restrictions on use : Use limited to five lunch vouchers per day.

Validity : Digital lunch vouchers are valid for twelve months.

Allocation to part-time employees

  • Conditions : An employee is entitled to one lunch voucher per working day if he or she has worked a minimum of 4 hours on that day.
  • Prorata : Lunch vouchers may be prorated according to the number of hours worked on a full-time basis. This decision is at the employer's discretion.

Contributions summary table

€

With employee participation

Without employee participation

Employee

Employer

Employee

Employer

Share

2,8 (*)

12,20

0

15,00

Taxation

0

0

2,8 (**)

0

Deductibility

/

12,20

/

15,00

Social charges

0

0

0

0

 

* Deducted from net salary

** Added to gross taxable salary

Download regulations
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How Pluxee can support you

At Pluxee, we're at the forefront of legislative developments concerning employee benefits. 

We offer you :

  • Advice and expertise: A dedicated team to help you understand and apply the new legal provisions.
  • Custom solutions : Offers tailored to the specific needs of your company and your employees.
  • Simple accounting : Assistance in efficiently integrating lunch vouchers into your accounting system, maximizing tax deductions.

This page is for information purposes only and does not constitute legal advice. For specific information, please consult a legal professional.

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