The tax-free meal subsidy enables employers to provide up to €7.50 per workday for high-quality meals (made up of a non-cash benefit of €4.40 plus an employee co-payment) without incurring payroll taxes or social security contributions (flat-rate taxation according to LStR R.8.1 para. 7). This boosts employee satisfaction, productivity, and retention while allowing companies to strengthen their employer branding and reduce labor costs. This article explains the legal framework, practical implementation, and concrete benefits for both companies and employees.
Benefits for Your Company
1. Cost efficiency through flat-rate taxation
The meal allowance can be taxed at a flat rate of just 25% under LStR R.8.1 para. 7, with no social security contributions due from either employer or employee. Compared to a traditional salary increase, this saves significant payroll costs and lets You use Your budget more effectively for employee benefits.
2. Increased productivity and performance
Well-nourished employees are proven to be more focused and resilient. A warm meal improves concentration and prevents energy slumps. By offering up to €7.50 per day for quality lunch or dinner, You reduce the stress around food breaks and ensure that Your team stays energized for the second half of the day.
3. Modern employer branding
In times of flexible work models and a growing talent shortage, every advantage counts in attracting and retaining talent. A flexible meal allowance that can be used in restaurants, cafés, or through delivery services shows that Your company is responsive to individual needs. This sets Your employer brand apart and appeals especially to young professionals and mobile employees.
4. Simple administration through digital tools
Apps and digital meal vouchers make managing the allowance effortless: balances are topped up electronically, expenses are tracked in real time, and receipts are submitted digitally. This relieves Your HR team of paperwork and gives You full transparency over spending and usage.
Benefits for Your Employees
1. More choice and flexibility
With the meal allowance, Your employees are no longer tied to the company cafeteria. They can choose their favorite bistro, organic restaurant, or simply order via an app from home. This freedom increases satisfaction as everyone can follow their own food preferences.
2. Everyday financial relief
Covering meal costs significantly reduces day-to-day financial stress—especially important given rising food prices. Employees appreciate the allowance daily as it directly increases their net income and gives them more budget for lunch.
3. Promotes health and wellbeing
A regular lunch routine with nutritious meals supports both physical and mental health. Balanced eating helps reduce stress and prevents energy crashes during the day.
4. Team spirit and community
When employees decide together where to eat or exchange tips on delivery options, it fosters social interaction. These informal moments strengthen team cohesion, encourage knowledge sharing, and make everyone feel more connected to the organization.
Legal Framework
- LStR R.8.1 para. 7: Regulates the flat-rate taxation of meal subsidies up to €7.50 per day for lunch or dinner.
- Non-cash benefit value (§ 8 para. 2 sentence 6 EStG): From 2025, the official value for a meal is €4.40. Employers can subsidize the difference to the actual meal price.
- Additional benefit: The allowance must be granted in addition to the regular salary and properly documented to remain tax-free.
What Can Be Funded with the Meal Allowance?
- Restaurant and cafeteria visits, including takeout and bakery snacks
- Grocery purchases of ready-to-eat meals or pre-prepared foods
- Digital meal vouchers and food delivery apps – usable from home or on the go
How to Introduce the Meal Allowance
- Needs assessment: Run a quick survey to understand Your team’s eating habits and preferences.
- Set internal guidelines: Define the amount (€7.50/day), usage rules, and documentation requirements.
- Communication: Share info via FAQs or an intranet post covering the tax rules and how to redeem benefits.
- Digital rollout: Choose a benefits platform or app (e.g. HelloBonnie) to automate the allowance.
- Monitoring: Collect feedback and usage data to continuously improve the offering.
Outlook: More Enjoyment, More Success
The meal subsidy (or meal allowance) is a proven lever for boosting employee satisfaction, optimizing costs, and enhancing Your employer brand. Especially in today’s flexible working world, it’s a modern alternative to the traditional company cafeteria – and a smart way to ensure Your teams remain healthy, motivated, and loyal for the long term.
