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No, meals provided at work for the convenience of the employer are deductible for the employer and tax-free for the employee. Meals provided for business purpo

No, meals provided at work for the convenience of the employer are deductible for the employer and tax-free for the employee. Meals provided for business purposes such as a lunch meeting away from the office are half deductible for the business and tax-free for the recipient. That's the USA rule (Canada too, I believe). Elsewhere may be different.

mjwalshe 15y ago
Bloody hell the IRS is a soft touch :-) In the UK they are very strict on benefits in kind. At one point BT decided that to do away with loads of messy individual kitchens and all the resulting arguments between employee arguments over who had not paid this months tea money. They would provide free tea and coffee in the new big work-style buildings. HMRC ruled that this was a taxable benefit and so that was that (I have actually seen the letter from HMRC to Group HR)
usaar333 15y ago
I checked awhile back and most software companies fail the convenience test. It is only allowed if the employee can't get food elsewhere (e.g. on an oil rig). See http://www.irs.gov/publications/p15b/ar02.html http://www.irs.gov/publications/p15b/ar02.html Exact text: Meals on Your Business Premises You can exclude the value of meals you furnish to an employee from the employee's wages if they meet the following tests. They are furnished on your business premises. They are furnished for your convenience. This exclusion does not apply if you allow your employee to choose to receive additional pay instead of meals. Whether you furnish meals for your convenience as an employer depends on all the facts and circumstances. You furnish the meals to your employee for your convenience if you do this for a substantial business reason other than to provide the employee with additional pay. This is true even if a law or an employment contract provides that the meals are furnished as pay. However, a written statement that the meals are furnished for your convenience is not sufficient. From http://www.irs.gov/publications/p525/ar02.html http://www.irs.gov/publications/p525/ar02.html Meals and Lodging You do not include in your income the value of meals and lodging provided to you and your family by your employer at no charge if the following conditions are met. The meals are: Furnished on the business premises of your employer, and Furnished for the convenience of your employer. Another source: http://www.journalofaccountancy.com/Issues/2000/Jun/TheHighCostOfAFreeLunch.htm http://www.journalofaccountancy.com/Issues/2000/Jun/TheHighC... Meals an employer provides as a means of disguising additional compensation to an employee are not regarded as furnished for the convenience of the employer under section 119. The IRS considers a meal as furnished for the employer’s convenience only if the company provided it for a substantial noncompensatory business reason. An employer furnishes a meal for such a reason when providing it So the employee is available for emergency calls during his or her meal period. Because the employee must be restricted to a short meal period and could not be expected to eat elsewhere in such a short time. Because the employee could not otherwise secure proper meals within a reasonable meal period, such as when there are not sufficient eating facilities nearby.Meals an employer provides as a means of disguising additional compensation to an employee are not regarded as furnished for the convenience of the employer under section 119. The IRS considers a meal as furnished for the employer’s convenience only if the company provided it for a substantial noncompensatory business reason. An employer furnishes a meal for such a reason when providing it So the employee is available for emergency calls during his or her meal period. Because the employee must be restricted to a short meal period and could not be expected to eat elsewhere in such a short time. Because the employee could not otherwise secure proper meals within a reasonable meal period, such as when there are not sufficient eating facilities nearby. In other words, if a company provides you with a free lunch, it probably is taxable income.

mjwalshe 15y ago

Bloody hell the IRS is a soft touch :-) In the UK they are very strict on benefits in kind. At one point BT decided that to do away with loads of messy individual kitchens and all the resulting arguments between employee arguments over who had not paid this months tea money. They would provide free tea and coffee in the new big work-style buildings. HMRC ruled that this was a taxable benefit and so that was that (I have actually seen the letter from HMRC to Group HR)

usaar333 15y ago

I checked awhile back and most software companies fail the convenience test. It is only allowed if the employee can't get food elsewhere (e.g. on an oil rig). See http://www.irs.gov/publications/p15b/ar02.html http://www.irs.gov/publications/p15b/ar02.html Exact text: Meals on Your Business Premises You can exclude the value of meals you furnish to an employee from the employee's wages if they meet the following tests. They are furnished on your business premises. They are furnished for your convenience. This exclusion does not apply if you allow your employee to choose to receive additional pay instead of meals. Whether you furnish meals for your convenience as an employer depends on all the facts and circumstances. You furnish the meals to your employee for your convenience if you do this for a substantial business reason other than to provide the employee with additional pay. This is true even if a law or an employment contract provides that the meals are furnished as pay. However, a written statement that the meals are furnished for your convenience is not sufficient. From http://www.irs.gov/publications/p525/ar02.html http://www.irs.gov/publications/p525/ar02.html Meals and Lodging You do not include in your income the value of meals and lodging provided to you and your family by your employer at no charge if the following conditions are met. The meals are: Furnished on the business premises of your employer, and Furnished for the convenience of your employer. Another source: http://www.journalofaccountancy.com/Issues/2000/Jun/TheHighCostOfAFreeLunch.htm http://www.journalofaccountancy.com/Issues/2000/Jun/TheHighC... Meals an employer provides as a means of disguising additional compensation to an employee are not regarded as furnished for the convenience of the employer under section 119. The IRS considers a meal as furnished for the employer’s convenience only if the company provided it for a substantial noncompensatory business reason. An employer furnishes a meal for such a reason when providing it So the employee is available for emergency calls during his or her meal period. Because the employee must be restricted to a short meal period and could not be expected to eat elsewhere in such a short time. Because the employee could not otherwise secure proper meals within a reasonable meal period, such as when there are not sufficient eating facilities nearby.Meals an employer provides as a means of disguising additional compensation to an employee are not regarded as furnished for the convenience of the employer under section 119. The IRS considers a meal as furnished for the employer’s convenience only if the company provided it for a substantial noncompensatory business reason. An employer furnishes a meal for such a reason when providing it So the employee is available for emergency calls during his or her meal period. Because the employee must be restricted to a short meal period and could not be expected to eat elsewhere in such a short time. Because the employee could not otherwise secure proper meals within a reasonable meal period, such as when there are not sufficient eating facilities nearby. In other words, if a company provides you with a free lunch, it probably is taxable income.