Explained: Meal Vouchers (Essensmarken) for Employees in Germany
Summary
Meal vouchers allow employers to provide their employees with a daily lunch allowance. This saves taxes for both employers and employees. It is a popular method of increasing an employee's net salary while minimizing taxes for the employer.
- The daily allowance for meal vouchers in Germany is max. €6.90 (2023) per employee.
- For companies, meal vouchers are in part tax-free and in part flat-taxed at 25%.
- Digital meal vouchers have important benefits over traditional meal vouchers, such as wider acceptance, more flexibility and less paperwork.
Employee Meal Benefits in Germany: What You Need to Know
Employee perks vary from country to country, and while meal benefits are common in many parts of the world, they are gaining traction in Germany.
A study conducted in 2018 revealed that subsidized lunches rank among the top 5 employee benefits in Germany. This is particularly appealing to younger employees who value non-financial perks in addition to monetary compensation.
In Germany, tax incentives exist for employers who contribute towards employee meals, benefiting both parties involved.
3 Key Points about Meal Vouchers in Germany You Should Know
It wouldn’t be Germany if this tax deduction would be easy and straightforward.
The tax implications of providing meal vouchers in Germany can be complex. Hence before implementing a meal voucher program, consider the following essential details:
1. Daily Maximum Allowance is €6.90 for 2023
For the year 2023, the maximum daily meal allowance has been set at €6.90 per employee. This means if an employee’s meal costs €7.50, an employer can contribute up to €6.90.
If the meal costs less than the allowance, the employer covers only that lower amount. For instance, if lunch costs €5.50, the voucher will cover exactly €5.50.
2. Company Tax Rate Depends on Several Factors
Employer contributions towards meal vouchers are partially tax-free and partially flat-taxed. For a maximum allowance of €6.90, the tax-free portion is €3.10, and the flat-taxed portion is €3.80. These amounts can vary based on the actual cost of the meal and the employee’s contribution.
Use this Tax Calculator for Assistance (In German)
How much taxes can I save?
Calculate how much your company can save on taxes by providing meal vouchers
3. Tax Savings for Both Employers and Employees
Since meal vouchers are considered a non-financial benefit, they offer tax advantages for both employers and employees. Employers can reduce social security contributions, while employees can lower their annual income tax.
Digital Meal Vouchers: A Modern Alternative
Digital meal vouchers are an emerging trend in Germany, offering several benefits over traditional vouchers:
- Acceptable at any restaurant, supermarket, or delivery service in Germany
- Eliminates the need for physical paperwork (receipts can be scanned via an app)
- Only subject to taxation upon redemption
We hope this guide clarifies the ins and outs of meal vouchers in Germany, an increasingly popular employee benefit. Interested in offering meal vouchers to your team?
If you want to know more about meal vouchers and fringe benefits in Germany, please get in touch with our English-speaking team at hi@matematemate.com
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