Blog & Resources

Are employee lunches tax deductible?

Employee meal costs, like lunch during a normal work day, are normally private non- deductible expenses. 

However, an employer can provide the following meals to employees, claim a tax deduction for the expenses and pay no fringe benefits tax:

1.  Tea, coffee and cakes provided on business premises for employees and customers.

2.  Sandwiches, muffins, fruit, pastries, etc. consumed during a work meeting or training session on business premises.

3.  A light meal and drink consumed on business premises while working. This includes pizza, takeaway food, drinks, etc.

4.  A light meal and drink consumed at a café by an employee during a meal break on a work day. 

Please refer to Private Binding Rulings (PBR) numbers 38556 and 91001.

By providing employees with free meals during a work day employers benefit from:

1.  Increased employee satisfaction, easier employee recruitment (as employees are getting a free benefit not provided by most employers).

2.  Increased employee productivity (as employees are more likely to work longer hours if they don’t need to leave the business premises for meals). 

3.  Business owners operating their business through a trust or company structure are also employees of the business. As such the business can also claim a tax deduction for their meal expenses when it meets the criteria detailed above. 

For claiming lunches with clients refer - client lunches

If you would like to discuss further please contact us:
 McNamara & Company - Chartered Accountants, located minutes from the Melbourne CBD
 Phone +61 3 9428 1062

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