Employers are looking for more and more attractive employee benefits. It is becoming a popular option to provide employees with meals not only in the form of company canteens, but also virtual payment cards, to which the employer transfers funds, and the employee can buy any meal, but also vouchers with a specific value used to pay for not only food items in selected stores.

Clients of our accounting office, PRWT, interested in diversifying their benefit offer, ask what the issue of taxing this type of benefits provided to employees looks like.

Generally, income from an employment relationship (not matter if it is in cash / not in cash) is taxable. However, the Personal Income Tax Act provides for some exceptions in which the tax is not due:

1) the value of the vouchers, coupons or other evidence received by the employee from the employer entitling him to obtain meals, food or non-alcoholic beverages on their basis, if the employer, despite his obligation resulting from the provisions on health and safety at work, is not able to providing employees with meals, food or non-alcoholic beverages (Article 21 (1) (11b) of the Act).

The provisions on health and safety at work refer to drinks and preventive meals provided by the employer to employees working in particularly onerous conditions. This includes, for example, working in a cold or hot work environment. Therefore, if the meals provided by the employer are regeneration meals, then their value is tax exempt. If, on the other hand, the employer wants to provide the employees with meals regardless of the conditions in which they work, then the value of such benefits will not be exempt from taxation.

2) the value of received by an employee in connection with the financing of social activities referred to in the regulations on the company social benefits fund, benefits in kind and cash benefits received by him in this respect, financed entirely from the resources of the company social benefits fund or trade union funds, in total up to in the amount not exceeding PLN 1,000 in the tax year; tangible benefits are not vouchers, coupons and other signs entitling them to be exchanged for goods or services; (Article 21 (1) (67) of the Act)

As a rule, funds from the Company Social Benefit Fund are exempt, but not in the case of vouchers and vouchers, as stated directly in the provision referred to above.

The applicability of the tax exemption therefore depends on the specific situation. Attention should also be paid to the issue of social security contributions on benefits received by employees. You can read about it in the next post on our blog.