Employer obligations arising from employment relationships

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• Employee income exempt from tax

The right to choose does not apply to all employees without distinction. It applies only to employees of employers who do not provide meals in their own catering facility or in a catering facility operated by another employer.

As a priority, the employer should provide employees with one hot main meal and a suitable drink during the shift in a proper catering facility. If the employer cannot fulfil this obligation, it is required to allow employees to choose between a meal voucher and a financial meal contribution. Under the transitional provision of Section 252p of the Labour Code, this obligation did not apply to an employer with a contract for providing meal vouchers until that contract expired, and at the latest until 31 December 2021.

Some employees are also entitled to a financial meal contribution where their employer provides meals in its own or a contracted catering facility, but those employees cannot use the facility because:

• the nature and conditions of their work at the workplace are specific,
• of the employees’ health reasons,
• they perform home work or telework and the employer-provided meals would conflict with the nature of that work.

An employee who chooses between a meal voucher and a financial contribution is bound by that choice for the following 12 calendar months. If the employer begins providing meals in a proper catering facility during that period, the employee’s entitlement to the financial contribution ends unless the employee simultaneously meets one of the reasons above preventing use of the facility. Proper meals always take priority over the contribution.

The law does not require an employer to monitor how a financial meal contribution is used.

The employer must provide a meal contribution; the contribution for comparable employees, regardless of how meals are provided, should be provided by the employer in the same amount (the “statutory contribution”):

• where meals are provided in a catering facility—at least 55% of the meal price and at most 55% of the allowance for a 5–12-hour business trip (€2.81),
• where a meal voucher is provided—the voucher must be at least 75% of the allowance for a 5–12-hour business trip (€3.83), so the financial contribution must be at least 55% of the voucher value (€2.11) and at most €2.81,
• where a financial contribution is provided—at least 55% of the voucher value (€2.11) and at most 55% of the allowance for a 5–12-hour business trip (€2.81).

Employee income exempt from tax

The value of meals provided by an employer for an employee to consume at the workplace during a shift and the value of a meal voucher are tax-exempt; the employee’s exempt income is not limited in this case. The employer may provide a meal contribution above the statutory contribution.

Where a financial meal contribution is provided, only a maximum of €2.81 is tax-exempt, with a minimum of €2.11; within this range, the exempt amount is the amount paid to comparable employees. The Labour Code conditions for providing a financial meal contribution must also be met. If an employer provides a contribution contrary to the Labour Code or above the statutory contribution, it is taxable income of the employee.

If, after consulting employee representatives under Section 152(9) of the Labour Code, the employer has changed the conditions under which meals are provided (for example during leave or obstacles to work), the statutory meal contribution paid as a voucher or financial contribution remains tax-exempt. However, if the employer expands the group of persons receiving meals under Section 152(9)(c), the option of choosing a financial contribution does not apply. A contribution paid to those persons is not income-tax exempt; only meals in a catering facility or a meal voucher may be provided.

To meet the tax exemption conditions under Section 5(7)(b) of the Income Tax Act, meals, meal vouchers or a financial meal contribution must be provided to the employee in advance, no later than when the employee’s entitlement to the meal arises. If the Section 152 Labour Code obligation is not met, the employee cannot apply the tax exemption to those benefits.

Similarly, for the employer, tax deductibility of employee meal expenses requires compliance with the conditions of the Labour Code. If meal vouchers or a financial contribution are provided retrospectively, the employer’s expense will not be tax-deductible under Section 19(2)(c)(5) of the Income Tax Act.