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Meal Allowances: What You Need to Know

25 August 2023

Meal allowances and meal pass/cards have become increasingly popular in India in recent years, especially among those employed in the corporate sector. As the cost of food persists to rise, providing employees with meal allowances or meal cards ensures that they can purchase quality food without straining their budgets. In addition, offering meal allowances and meal cards enables employees to get the nutrition they need to stay healthy and productive.

Meal subsidies or allowances are an important part of the compensation package offered by employers to their employees. While these allowances can vary greatly from employer to employer, there are certain rules and regulations that all employers must adhere to so that employees receive fair and equitable meal allowances.

This blog will provide an overview of essential information that all employers should be aware of when it comes to employee meal subsidies.

 Knowing Meal Allowances Better

According to a 2019 Talent Market Report, both small and large companies are likely to offer meal allowances to their employees, with small companies offering them 17% of the time and large companies providing them 37% of the time. It helps them build a good repo with the employees.

Another essential factor is the type of meal allowance that is being offered. Three types of allowances exist: fixed, flexible, and per diem. Fixed meal allowances are typically based on the federal minimum wage. Flexible meal subsidies are more lenient and allow employees to choose how much they spend on food and related items. 

Companies like Pluxee provide meal passes and meal & benefits for employees. These cards can be used digitally, reducing the hassle of carrying a card every time you go out to eat. For example, a Pluxee Meal Benefit is a prepaid card used by network merchants to pay for food. Finally, per diem allowances are based on a daily rate and are typically used to reimburse employees for meals purchased while away from the office.

Food allowances can cover the cost of food and non-alcoholic beverages purchased while travelling for business. It may include meals in restaurants, fast food, convenience stores, and coffee shops, and groceries purchased for in-room dining.

Consideration When Evaluating Meal Allowances

The most important considerations when evaluating food allowances are cost, quality, timeliness, accessibility, variety and flexibility should be considered while assessing allowances. So let’s dive into them briefly: 

  • First, it is essential to consider the cost of meals in the area where the employees will use the allowance. Meal allowance amounts should be adjusted to reflect the area's cost of living so that employees can purchase affordable, nutritious meals. Additionally, the allowance should be sufficient to cover the cost of meals for the duration of the employee's travel.
  • Second, employers should consider the purpose of the meal allowance. For example, is it intended for business purposes, such as to cover the cost of meals when travelling for work, or is it meant to provide employees with a stipend for meals while at home? Again, the purpose of the allowance will dictate how much should be provided.
  • Finally, employers should consider any applicable laws or regulations related to food allowances. For example, certain states or local jurisdictions may have laws regarding meal expenses that must be adhered to.

Benefits of Offering Meal Allowances to Employees

Providing employees with food allowances helps reduce the time they spend away from their desks to purchase food, allowing them to focus more on their work. Other advantages of providing allowances to employees are:

  • Increased morale, improved health, lower expenses, tax savings and job satisfaction are some advantages of providing food allowances.
  • Food allowances encourage employees to make healthier food choices, as they are more likely to purchase nutritious and beneficial food for their overall health. 

Meal cards are a slightly different form of the meal allowance. Employers can provide them with meal passes for designated restaurants. These cards typically have a set amount of money loaded, and employees can use it to purchase meals from selected restaurants. Meal cards are an excellent way for employers to ensure employees can access quality meals without worrying about their budget.

Pluxee meal pass are convenient and secure payment cards allowing employees to purchase meals at various participating restaurants, cafes, and other food outlets. The cards are issued by Pluxee and can be used to pay for meals at participating 5 million+ outlets (offline and online stores) nationwide. The cards are available in physical and digital formats and can be used to pay for meals at restaurants, cafés, and other food outlets. They are accepted at many restaurants, including fast food outlets, casual dining restaurants, and fine dining establishments. The cards can also be used to pay for groceries and other items. In addition, the cards are reloadable and can be topped up with funds whenever needed.