Save Money With Food Subsidies

Food Subsidies are the perfect alternative to a raise. Feed your team and save on taxes at the same time.
We will teach you how easy subsidizing can be in Germany.

Advantages of Food Subsidies

As part of an initiative by the German tax office (Bundesfinanzamt), employers can subsidize various work related things. Food is one of the most sensible choices: everyone has to eat and everyone likes saving money on it.

Per day, companies can subsidize 6.57 EUR per employee and day. This way up to 148 EUR monthly can be invested in each team member without additional social or income tax on top. With little effort and costs, both employers and employees will benefit from food subsidies!

Since we didn't want you to get lost in German finance documents, we made an accessible guide for you to understand all possible benefits in kind and gifts that can be granted tax-free:

Read our guide to benefits in kind

Benefits of feeding Employees:

Easy - subsidized meals are a simple solution for companies wanting to raise employee satisfaction and retention. Having the optimal work break with affordable lunch will also improve the productivity of your team. Plus, food subsidies are the only benefit that can be used by every employee equally. That's why making a healthy lunch option more affordable for your team will have great impact.

Joined lunches are also proven to bring teams together, promote healthy eating and boost up those brain cells after the break.

Team-Building

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Raises Productivity

proficiency

Promotes Health

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Employee Retention

Employee Retention

And the best thing? Food subsidies can be granted in addition to other benefits in kind such as services or gifts. With perks becoming more and more important to employees, companies can use a variety of possibilities to stick out and make employees happy.

Food Subsidy Value 2021

Every year, the value for benefits in kind is reassessed by the German tax office (Finanzamt). Since retail prices are used as guidelines, the value has continuously been raised in past years and can be expected to follow this trend. While the food subsidy value in 2009 was 5,83 EUR per lunch, in 2021 it has been raised to 6,57 EUR per day and employee.


This value for meal subsidy is made up of these components:

Lunch / Dinner

1. Non-cash remuneration value

3.47 €

2. Additional employer payment

3.10 €

(3. optional employee supplementary payment)

(>3.47 €)

Breakfast

1. Non-cash remuneration value

1.83 €

2. Additional employer payment

3.10 €

(3. optional employee supplementary payment)

 
(>1.83 €)

 

Additional Payment

Employers can pay € 3.10 any meal, without additional social or income tax. The non-cash remunerations value for food subsidies is equal to the minimum amount that employees have to pay to the meals themselves to take full advantage of tax breaks.

If less than 3.47 EUR is paid by them, employers have the choice to pay a lump-tax of 25 % in order to avoid social taxes completely. If both non-cash remuneration and supplementary payment are paid, both sides will benefit.

If all this sounds complicated, don't worry. We have broken it down into easy examples so you can understand how simple saving money through subsidy can be in Germany.

Practical Examples for Food Subsidy

Meal price: 3.10 EUR

Since the lunch is so cheap, only the company pays the full supplementary amount. The employee therefore pays 0.00 EUR.

Monetary advantage

The difference between what the employee paid and the 3.47 EUR remuneration value will have to be taxed. Since no supplementary payment was made by the employee, the tax office will count the full 3.47 EUR as monetary advantage.

Tax conditions

The remuneration value of 3.47 EUR will be taxed fully or at a lump-tax amount of 25 % if the company wants to further support employees. Employers will benefit by paying the lump-tax as they save on social taxes as result.

Saving:

The employee saves 3.10 EUR for lunch but wil be taxed for the benefit. Employers pay for lunch but save on social and wage taxes.

Meal price: 6.10 EUR

This time both parties pay. The company again pays the allowed additional lunch payment of 3.10 EUR, leaving the employee to cover the leftover 3.00 EUR.

Monetary advantage:

For the employee, a monetary advantage of 47 cents is assumed. That's because once again the tax office considers the difference between 3.47 EUR non-cash remuneration and employee payment as taxable income: 3.47 EUR - 3.00 EUR = 0.47 EUR

Tax conditions:

These 47 cents will have to be taxed fully or with lump-tax of 25%. The supplementary employee payment of 3.00 EUR is not taxed.

Savings

6.10 EUR will be social and wage tax free for both employer and employee. Only 47 cents will have to be taxed.

Meal cost: 6.57 EUR

A food voucher worth 6.57 EUR is given to every team member. The company pays 3.10 EUR and converts 3.47 EUR gross wage of each employee as their supplementary payment to the meal.

Monetary advantage

Since the full amount is covered, there is no monetary, taxable advantage.

Tax conditions.

This scenario will make the meal completely tax-free.

Saving:

The full 6,47 EUR is completely social and wage tax-free for both company and employees. While 3.47 EUR has to be paid by each employee, the gross wage is lowered, resulting in less taxable wage overall!

Meal cost: 12.00 EUR

For a nice lunch at a restaurant the employer pays 3.10 EUR while the employee has to cover 8.90 EUR herself.

Monetary advantage:

The full 3-47 EUR of the reference value was included in the 8.10 EUR. No monetary benefit has to be taxed.

Tax conditions:

This scenario will make the meal completely tax-free.

Savings:

Of the 8.10 EUR paid by the employee, 3.47 EUR are free of tax. The full 6.57 EUR are thus completely social and wage tax-free for both parties.

Food Subsidy Options

Food subsidies do not necessarily have to be linked to a company owned canteen, but can be granted in a multitude of ways. Companies can even save on sales taxes (Umsatzsteuer) if no service is included in the meal, as there would be with any sit-down meal in restaurants and canteens. Nonetheless, canteens outside of the office, restaurants, food stamps and even ready-to-serve meals from supermarkets are allowed to be subsidized without social or income tax.

Read more about which regulations should be considered to receive food subsidies!

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Digital Food Subsidy

Spare yourself time-consuming gathering of paper vouchers and receipts. The tax office allows digital food vouchers to be used when buying meals and accepts digital receipts. For that, certain apps or delivery services like Smunch will make using food subsidies easier.

Learn more about digital food vouchers and delivery services that include tax breaks!