Benefits in Kind in Luxembourg: Complete Tax Guide

What is a Benefit in Kind?

A benefit in kind is non-monetary compensation provided by the employer to the employee. In Luxembourg, these benefits are generally subject to income tax and social contributions.

Company Car

The most common benefit in Luxembourg, with specific rules:

Flat-rate calculation: 1.5% of purchase value including VAT per month
Private use: Must be proven to avoid taxation
Electric vehicles: Reduced tax advantages
Fuel included: 0.5% increase if covered

Company Accommodation

Significant benefit with precise rules:

Rental value: Based on local market
Charges included: Electricity, heating, internet
Possible reduction: If accommodation is necessary for the position

Meal Vouchers

Highly appreciated social benefit:

Exemption: Up to €10.80 per day
Employer contribution: Maximum 50% of amount
Possible combination: With other food benefits

Other Common Benefits

Mobile phone: Professional use required
Supplementary health insurance: Generally exempt
Training: Exempt if related to position
Transport allowance: Partially exempt

Declaration and Calculation

Benefits in kind must be:

Declared monthly on the payslip
Included in gross salary for tax calculation
Subject to social contributions as applicable

Tax Optimization

Strategies to optimize benefits in kind:

Prefer exempt benefits (meal vouchers)
Document professional use of equipment
Negotiate benefits according to tax situation

Our calculator automatically integrates all these benefits in kind to give you a precise view of your real net salary.