Three things to know about Luxembourg's bonus for young workers

Designed to support young professionals, the scheme benefits many workers under 30. Here’s what you need to know.

1. Who is eligible for the young employee bonus?

According to the Chamber of Employees, this bonus is available to workers under 30 who have signed their first permanent contract in Luxembourg. It also applies to those employed by a company with a permanent establishment in Luxembourg, even if the contract was signed abroad.

However, once a worker changes employers, they are no longer eligible for the bonus.

Read more: Key changes that came to Luxembourg in 2025

2. How does the bonus work?

The young employee bonus is not mandatory – it is granted at the employer’s discretion. If offered, the worker benefits from a significant tax advantage, as only 25% of the bonus is taxable.

Since the bonus is employer-funded, it is also the employer’s responsibility to verify the worker’s eligibility.

3. How much is the bonus?

The government has capped the bonus at €5,000, with tax exemptions depending on salary:

• €5,000 if the annual gross salary is €50,000 or less
• €3,750 if the annual gross salary is between €50,001 and €75,000
• €2,500 if the annual gross salary is between €75,001 and €100,000

For a worker earning €50,000 or less, this means only €1,250 of a €5,000 bonus is taxable, with the remaining €3,750 tax-free. Bonuses are adjusted proportionally for part-time employees.