½Û×ÓÊÓƵ

Luxembourg allows employees various fixed and flexible employment-related deductions against their earnings (see 2.1.2). See also the deductions under the special expatriate regime at 6.3 and the commuting costs exemption at 7.1.

Business travel

It is possible to reimburse employees the actual receipted cost incurred for business expenses. Such a reimbursement is not subject to tax or social security contributions in the employee's hands. Alternatively the employer can pay a per diem to their employee and so long as the per diem rate is not exceeded (2.1.2), the payment is tax and social security free. Any amount exceeding the threshold is subject to tax and social security.

Car (mileage) allowance

A business travel allowance can be paid tax and social security contributions-free in Luxembourg to employees for the use of their own cars on business trips. The allowable rate is EUR 0.30 per business kilometre regardless of the employee's total annual business mileage or the type or size of their car. This rate has not changed since 2015 and remains valid for 2023 (Memorial A134, 19 June 2015).