Employee Meal Expenses on Business Premises
Employee meal costs, like lunch during a normal work day, are normally private non- deductible expenses.
But an employer can provide the following meals to employees, claim a tax deduction for the expenses, and pay no fringe benefits tax:
- Tea, coffee and cakes provided on business premises for employees and customers.
- Sandwiches, muffins, fruit, pastries, etc. consumed during a work meeting or training session on business premises.
- A light meal and drink consumed at a lunch bar or café by an employee during a meal break on a work day.
- A light meal and drink consumed on business premises while working overtime. This includes pizza, takeaway food, drinks, etc.
By providing employees with free meals during a work day employers benefit from the increased employee satisfaction, easier employee recruitment (as employees are getting a free benefit not provided by most employers), and increased employee productivity (as employees are more likely to work longer hours if they don’t need to leave the business premises for meals).
Business owners operating their business through a trust or company structure are also employees of the business. As such the business can also claim a tax deduction for their meal expenses when it meets the criteria detailed above. The tax savings on spending $5,000 pa on employee meals is $1,425 (for a company on the 28.5% tax rate).