Food allowances – higher exemption from social insurance contributions

 

The base for assessment of retirement and disability pension insurance contributions equals gross income. However, there are a number of exemptions whereby the value of meals financed by the employer and provided to employees for consumption, without the right to a payment in lieu, is not included in the base for assessment of contributions up to a specific amount. 

 

From the beginning of September this year, the exemption amount that the employer may deduct from the base for assessment of social insurance contributions is 450 zloty. 

 

Importantly, the exemption applies as well to meals in the form of vouchers, prepaid cards or other coupons which may be used in food and commercial outlets.

 

 

Please remember that food allowances are subject to PIT. This means that employees will have to pay income tax on the above-mentioned amount because the subsidy will be treated as their income. The employer may include the expenses for meal subsidies in tax-deductible expenses as long as they are properly documented. 

 

These changes may help to make benefit packages, and thus employers, more attractive. If you have any questions about the above regulations, please contact us.