Meal allowance: How to support employees and minimize the impact of inflation?
13 de December, 2022
The rise in inflation has been an unavoidable topic in recent months. Last November, inflation in Portugal was 9.9%. And if we talk about food, the price increase is even higher. According to DECO Proteste, on November 30th, 2022, the same basket of food cost €35.59 more than on February 23rd of this year.
This context demonstrates the importance of companies finding ways to maximize their employees’ disposable income, while seeking to promote their well-being and quality of life (particularly with regard to safeguarding a decent diet).
Find out how you can do this by increasing your meal allowance!
Amount exempt from card taxation rises to €9.60/day
Ordinance no. 107-A/2023 of April 18 updated the value of the meal allowance paid to public sector workers from €5.20/day to €6.00/day, with retroactive effect from January 1st, 2023.
As a result, the amount exempt from taxation on vouchers or cards has also risen to €9.60/day (until now it was €8.32/day).
This means that if you already give your employees a meal allowance in the form of a voucher or card, you can now increase the amount given up to €9.60, while keeping all the tax benefits:
- Total TSU exemption for the company;
- Total exemption from IRS and TSU for the employee.
In practice: if you were paying €8.32/day in cards, your employees would receive a total of €183.04/month. Now, if you start paying €9.60/day, that monthly figure will be €211.20.
This increase in purchasing power through the meal allowance allows companies to maximize their employees’ liquidity without this resulting in an increase in the tax burden – either for the company or the employee – since the TSU and IRS exemptions are maintained.
Why increase the meal allowance?
The meal allowance is a social benefit with tax advantages that aims to help workers cover the cost of food during their working day. When it is paid in vouchers or cards, there is a guarantee that the value of the allowance is actually used for food expenses, since meal vouchers can only be used in restaurants and other food establishments. There is no such guarantee when the allowance is paid in cash, which is why the tax benefit associated with social vouchers is higher.
Thus, by increasing the value of the allowance given in vouchers or cards, you are helping to increase disposable income , thereby promoting a decent, balanced and nutritious diet during the working period.
Social meal vouchers: a virtuous circle that boosts the circular economy
Meal vouchers or cards can only be used in restaurants and other food retail establishments (supermarkets, cafés, pastry shops, bakeries, grocery stores, butchers and fishmongers, among others).
In this way, its use promotes consumption in this sector of activity, boosting business and the local economy.
Ultimately, society as a whole benefits from the circulation and use of these vouchers, which stimulate the labor market, promote employment and reduce the informal economy.
At a time when rising prices are making it increasingly difficult for families to manage their monthly budgets, a rise in the meal allowance could help mitigate the effects of inflation.
Especially when it comes to food and access to basic necessities, this increase can make all the difference!
Article updated in April 2023 (to take into account the new meal allowance rates in force).
Note: in December 2024, the maximum amount exempt from card taxation will be €10.20/day.