Published on 18/08/2026 · Sources last reviewed: 20/08/2026 · Our method

Two offers at the same gross are not worth the same

A candidate compares two offers on annual gross pay. It is the only figure they can compare on their own — and it is the wrong one. Here are the four items that make the difference, and the shortcut each of them carries.

This article describes the law in force in August 2026. The four items share their sources — the direct tax administration, the joint social security centre and Guichet.lu — and each is quantified from them.

Meal vouchers: €2.80 stays at your expense

The meal voucher is worth €15. The exempt share is €12.20; the remaining €2.80 is at your expense.

A voucher presented as “free” therefore costs you nearly a fifth of its face value. In return it carries no social contributions and does not have to be declared.

Twenty vouchers a month thus represent €244 of real benefit, not €300.

This is the least well understood item, because only the first cap is ever quoted.

The two caps, in order

1. The exemption covers 50 % of the bonus.

2. But it cannot exceed 25 % of your annual gross pay.

Beyond a bonus equal to half your annual salary, the exemption stops following.

The base for that 25 % is ordinary pay — overtime and periodic bonuses included, gratuities and thirteenth month excluded. Keeping only the 50 % rule makes you promise, on large bonuses, a tax advantage that does not exist.

Overtime: the premium, not the hour

The shortcut “overtime is tax-free in Luxembourg” circulates everywhere. It is false, and it overstates the gain by a factor of three and a half.

An overtime hour is paid at 140 %. The 100 % remains taxable as salary. Only the 40 % premium escapes tax and contributions. Where a collective agreement provides a higher premium, that excess is exempt too.

On an hourly rate of €30, the exemption therefore covers €12, not €42.

The supplementary pension: a negotiating point, not a gift

The contributions your employer pays into a supplementary pension scheme are taxed on entry, in Luxembourg, through a flat 20 % withholding borne by the employer. That taxation is final: you declare neither the contributions nor the withholding.

For a Luxembourg resident the matter is closed — taxed once, on the way in.

⚠ For a French cross-border worker it is not

The contributions are taxed on entry in Luxembourg, then the benefits are taxed on exit under French law. Accepting a supplementary pension without knowing this means accepting a perk whose tax is paid twice.

This is not a computational detail: it is a line to discuss before signing, on the same footing as the gross salary.

What we do NOT claim. The source establishes this treatment for France. It does not say that the other countries of residence are exempt from it, nor that they are equally affected — and we will not extend the rule by analogy in either direction. If you live in Belgium or Germany, have your situation confirmed before signing: for you, the point is simply not documented.

The distinction that changes everything: exempt is not net

An exempt perk improves what is left to live on. It does not enter your net pay.

The difference is not accounting, it is concrete. What is exempt counts neither towards your pension, nor your unemployment benefit, nor in a mortgage application. An offer with a lower gross but rich in perks can leave you more money each month while covering you less well on the day the job stops — and weighing less with a banker.

That is exactly why our engine adds perks to what is left to live on without ever adding them to net pay.

Key points

The meal voucher is worth €15, of which €2.80 at your expense.
The profit-sharing bonus is 50 % exempt, capped at 25 % of annual gross.
On an overtime hour, only the 40 % premium is exempt.
The supplementary pension is taxed on entry in Luxembourg and on exit in France.
An exempt perk raises what is left to live on, not your pension or your unemployment benefit.

Frequently asked questions

Are meal vouchers really free for the employee? No. The voucher is worth €15 in total, of which €12.20 is exempt and €2.80 stays at your expense. A voucher presented as “free” therefore costs you nearly a fifth of its value. In return it carries no social contributions and does not have to be declared.

Is the profit-sharing bonus 50 % exempt? Not always. Two caps overlap: the exemption is 50 % of the bonus, but it cannot exceed 25 % of your annual gross pay. Beyond a bonus equal to half your annual salary, the exemption stops following. The base for the 25 % is ordinary pay, excluding gratuities and thirteenth month.

Is overtime tax-free in Luxembourg? Only the premium is. An overtime hour is paid at 140 %: the 100 % remains taxable as salary, and it is the 40 % premium that escapes both tax and contributions. The shortcut “overtime is tax-free” overstates the gain by a factor of three and a half.

Is an employer supplementary pension a good perk for a French cross-border worker? It is a negotiating point, not a gift. Contributions are taxed on entry in Luxembourg through a 20 % final withholding borne by the employer, then the benefits are taxed on exit under French law. Have the treatment confirmed before you sign.

Does an exempt perk raise my net pay? No, and the distinction matters. An exempt perk improves what is left to live on, but enters neither your pension, nor your unemployment benefit, nor a loan application. At a lower gross, an offer rich in perks can leave you more each month while covering you less well.

Compare two offers with different perks The Relokea engine values the exempt share of each perk and adds it to what is left to live on — without ever mistaking it for net pay.

Compare my offers

Official sources

Tax administration (ACD) — Profit-sharing bonus: 50 % exempt, capped at 25 % of annual gross (accessed on 18/08/2026)
ACD — Profit-sharing bonus FAQ: the base for the 25 % cap (accessed on 18/08/2026)
ACD — Salary supplements: only the premium is exempt (accessed on 18/08/2026)
CCSS — Pay: treatment of meal vouchers and supplements (accessed on 18/08/2026)
Guichet.lu — Employer supplementary pension: 20 % final withholding tax (accessed on 18/08/2026)

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