Employee purchasing power in Luxembourg: How to improve it without increasing your payroll costs

To face inflation, Luxembourg employers have several options to support their teams’ purchasing power without necessarily increasing gross payroll costs:

The meal voucher is the most immediate, most visible, and most tax-advantageous lever for concretely improving employees’ everyday purchasing power. It acts directly on an unavoidable expense — food — and its effect is felt every single day.

A meal voucher is an employee benefit that allows employers to contribute to their employees’ meals in a tax-efficient way. In Luxembourg, the maximum legal face value is €15 per voucher. The maximum employer contribution can reach €12.20, exempt from social contributions. The employee contribution is €2.80.

Up to €2,635.20 in net purchasing power per employee/year, fully exempt from contributions and taxes for the employer. (Pluxee calculation: €12.20 (face value of a €15 voucher minus employee contribution) × 18 vouchers × 12 months)

Based on the Consumer Price Index (CPI) data published by Statec Luxembourg, the annual increases in food products and hotels, cafes, and restaurants are as follows:

Cumulative inflation 2021–2026: +51.5% on food and dining → loss of -34% in purchasing power for a meal voucher whose face value has remained unchanged.

For food products alone: +24.6% cumulative → -20% in purchasing power (Statec Luxembourg, 2021–2026).

Eurostat data (HICP Luxembourg, January 2021 – December 2025. Base index 100 = 2015) confirm the trend across everyday products:

• Butter: +44,2%
• Coffee, tea and cocoa: +41,0%
• Whole milk: +31,8%
• Bread: +26,2%
• Eggs: +26,0%
• Vegetables: +21,4%
• Fruits: +17,2%

“A healthy meal in Luxembourg can now exceed €14, whereas it was around €10 four or five years ago. Same budget, less on the plate.”

The maximum legal face value of meal vouchers in Luxembourg is €15 per voucher. The legal breakdown is as follows:

• Maximum exempt employer contribution: Up to €12.20 per voucher (exempt from social contributions)
• Minimum employee contribution: €2.80 per voucher

The daily spending limit is legally set at 5 times the face value of a meal voucher:

This is one of the most frequently asked questions regarding employee benefits in Luxembourg.

A gross salary increase entails:

• Employer social contributions
• Employee social contributions
• Income tax for the employee

Result: €1 invested by the employer never generates €1 in net take-home pay for the employee through a salary increase.

With a revalued meal voucher (≤ €15/voucher):

• No employer social contributions
• Exempt from social contributions
• Not taxable for the employee

With the meal voucher, the vast majority of every euro invested by the employer goes directly into the employee’s purchasing power: no employer contributions, no social contributions, no income tax. It is the most tax-efficient compensation tool for rewarding your teams in Luxembourg.

In a competitive labour market, total compensation — meaning gross salary plus all benefits in kind and employee perks — has become just as important a deciding factor as salary alone. Candidates compare compensation packages as a whole, and everyday benefits like meal vouchers tip the scales.

According to the study The New Rules of Employee Engagement (Pluxee, 2025), employees rank employer attractiveness criteria as follows:

1. A good salary: 53%
2. Benefits tailored to their needs: 36%
3. Real career development opportunities: 30%

Tangible benefits outrank career development in employees’ priorities. The meal voucher meets two criteria at once: it supplements net pay and constitutes a benefit felt every single day.

Over 50% of Pluxee Luxembourg clients already have a face value above €10.80. In a talent war context, your competitors may have already acted. A simple, visible benefit that makes the difference when talent chooses an employer.

The Quality of Work Index in Luxembourg stands at 53,4/100 in 2025, its lowest level since 2014 (Quality of Work Index, Chronicle.lu). In a strained labour market, retaining employees is as much an economic priority as a social one.

According to Moovijob.com (2026), the cost of voluntary turnover in Luxembourg can represent between 30% and 200% of the annual salary of the position in question, i.e. up to €150,000 per departure, factoring in:

• Recruitment and headhunting
• Internal hours spent
• Onboarding and training of the replacement
• Loss of productivity during the vacancy
• Loss of expertise and institutional knowledge

Increasing the face value of meal vouchers by +€1 or €2 per year represents a tiny fraction of this cost, and sends a strong signal to your teams.

Revaluation does not need to be immediate or maximal to have an impact. A gradual approach is possible:

• This year: +€1 or €2 on the face value
• Next year: +€1 additional
• Long-term goal: reach the legal ceiling of €15

Each additional euro:

• Offsets part of the inflation absorbed by employees
• Remains exempt from contributions up to the legal ceiling
• Increases the employee’s daily spending limit
• Boosts satisfaction and reduces turnover risk

The real question is not: can you afford to revalue? But rather: can you afford not to?

• Cumulative inflation 2021–2026 in Luxembourg stands at +51.5% on food and dining (Statec).
• A meal voucher with a fixed face value has lost 34% of its real purchasing power since 2021.
• The legal ceiling in Luxembourg is €15 per voucher, equivalent to €2,635.20 in annual net purchasing power per employee.
• With the meal voucher, the vast majority of every euro invested goes directly into the employee’s purchasing power: no contributions, no income tax.
• A voluntary departure can cost up to €150,000 for a Luxembourg company.
• More than 50% of Pluxee Luxembourg clients already have a face value above €10.80.

Want to find all the key data at a glance or share it with your management or HR teams? 

Download our summary infographic!