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| January 16, 2024

What changes await us from the new year in terms of contributions to meals?

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As of the new year, the consolidation package has unified the tax regime for all types of employee meals, i.e. contributions in monetary and non-monetary form. Non-monetary employer contributions in the form of paper meal vouchers, meal voucher cards or direct provision of company meals have so far been fully exempted on the employee’s side, while monetary contributions or the so-called flat-rate contribution to meals meal have been exempted only up to a set limit of 70% of the upper limit of the meal allowance that can be provided for a business trip lasting 5 to 12 hours according to the Labour Code, i.e. for the year 2023 only up to CZK 107.10. From 1 January 2024, all contributions to meals, regardless of form, will be exempt only up to this statutory limit, which is expected to increase to CZK 116.20 for the year 2024. The part of the contribution exceeding this limit will then be considered as income of the employee subject to tax and insurance, regardless of the form of the contribution.

There is also a new condition for the exemption that the employee must work at least 3 hours per shift. However, the contribution may also be granted to employees who do not have their work scheduled in shifts. Employees who work a shift longer than 11 hours will benefit from the exemption for such a shift up to twice the applicable limit (i.e. 2 x CZK 116.20 per shift), which was previously only possible for paper meal vouchers.

Employers can look forward to the abolition of the 55% tax deductibility limit for non-cash contributions and thus to the full tax deductibility of all costs incurred for contributions to meals, regardless of their form. In the case of paper meal vouchers, with the same cost for the employer, the net value of the benefit to the employee may therefore even increase in case of a certain amount of contribution.

In addition, due to the change in the provision, according to which catering costs are tax deductible for employers from January, the condition of working a 3-hour shift is also abolished. It is sufficient, if the conditions for providing contributions to meals are laid down in a collective agreement, an internal regulation or directly in the contract with the employee.