Food allowance: What the law says in Portugal
18 de February, 2025
The food allowance is a very important salary supplement for a significant proportion of workers in Portugal. The amount granted by companies to their employees is intended to compensate them for the cost of having a meal during their working day.
But what does Portuguese legislation say about food allowance? What is it, how can it be paid and who is entitled to it? These are just some of the questions we answer in this article for you.
What is the food allowance?
The food allowance is a social benefit that companies – both public and private – can grant to employees to ensure that they have access to a decent meal during their working day.
As such, the amount of the meal allowance can be used to purchase meals or foodstuffs to prepare them.
What is the legal and fiscal framework?
The meal allowance was introduced into Portuguese legislation in 1979. Decree-Law no. 297/79, of August 17, established exceptional rules for the food allowance, which was thus excluded from the payment of professional tax up to the maximum amount allocated to public sector workers.
However, although this reference has existed since 1979, there is still no specific legislation regulating the conditions for issuing, awarding and using meal tickets in our country.
The tax framework applicable to the food allowance is laid down in the IRS Code (CIRS) and the Social Security Contributions Code.
Because it is a social benefit, food allowances are treated differently from salaries. Depending on the amount awarded and the format in which it is awarded, both the employer and the employee may have tax benefits associated with it:
- Cash: exemption from the Single Social Tax (TSU) for the company and exemption from IRS and TSU for the employee up to a maximum daily amount of €6.00.
- Social voucher or meal card: exemption from the Single Social Tax (TSU) for the company and exemption from IRS and TSU for the employee up to a maximum daily amount of €10.20.
The amount of the food allowance for public administration workers – in this case, €6.00/day – serves as a reference and corresponds to the maximum exemption amount when the allowance is paid in cash.
If it is granted in the form of a ticket or meal card, there is a 70% surcharge, and the maximum amount exempt from taxation is €10.20/day.
How can the food allowance be paid?
The allowance is paid for each day actually worked, i.e. its payment is not required on days when the employee does not work (e.g. during vacations or holidays, in cases of illness, during parental leave or marriage leave, in the event of unjustified absence or when exercising the right to strike).
Bearing in mind that the food allowance is a supplement to remuneration, and that legislation in Portugal does not oblige it to be paid, the way in which it is allocated to employees is up to each company.
With regard to the format in which it is awarded, the food allowance can be granted:
- In cash: in cash, together with the monthly salary;
- Through a voucher (meal card): prepaid electronic card, loaded by the company with the stipulated amount.
The food allowance card is an increasingly popular option for companies in Portugal, as the associated tax benefits allow companies to maximize their employees’ disposable income without increasing the tax burden.
Is the food allowance compulsory?
Since it is an extra-wage benefit and is not included as mandatory in the Labor Code, the food allowance is only due if it is provided for in an individual or collective labor contract.
Although employers are not obliged to grant it, most companies choose to do so in order to maximize employees’ purchasing power for food expenses.
Even so, according to the most recent figures from the Gabinete de Estratégia e Planeamento do Ministério da Segurança Social for 2022, 1.7 million workers in Portugal – around 6 out of every 10 employees – were still not receiving food subsidies at the time.
Is there a minimum limit? And a maximum?
The legislation does not set any minimum or maximum limit for the payment of meal allowances.
The amount paid to public sector workers, which is €6.00/day, serves as a reference for the maximum daily amount exempt from taxation in cash. In turn, the maximum tax-free amount in meal cards is €10.20/day (70% more than in cash).
However, this does not mean that employers cannot grant any other amount. Private sector companies are free to pay any amount to their employees: if they give more than €6.00 in cash, or more than €10.20 in a meal card, the respective discounts apply to the remaining amount.
Who is entitled?
All public sector workers are entitled to the food allowance. In addition, workers in the private sector are also entitled, in cases where this allowance is provided for in their employment contract (individual or collective).
These also include:
- Teleworking workers: if the allowance is included in the individual or collective employment contract, these workers are still entitled to receive it, even if they are working remotely (as provided for in Law no. 83/2021, of December 6).
- Part-time workers: if payment of the allowance is included in the employment contract (individual or collective), part-time workers are entitled to receive it. If the working period is five hours or more, the amount must be paid in full; if it is less, the amount is calculated in proportion to the number of hours worked.
Do you have any additional questions about the food allowance? Don’t hesitate to contact us, our team is always happy to help.