Benefits overview (Part 4): employee meal allowances

Employers provide meal allowances not only to their current but often also to their former employees. In addition to allowances towards main meals, employees often have access to refreshments on the employer's premises and at company events and training sessions. It is also common for employees to attend business lunches with clients or meetings between team members at the employer's expense. 

Read the previous parts of the series: 
What to prepare for with introduction of JMHZ: employee benefit reporting  
Pre-school and school fees as employee benefits 
Sports and healthcare employee benefits
 

Change in the tax treatment of meal allowances

As part of the consolidation package, the taxation of meal allowances has fundamentally changed: instead of the previous limit on tax deductible expenses for employers, a limit on the tax exemption for employees has been introduced.  

From 2024, it is necessary to monitor the annually changing exemption limit for employees, set at 70 per cent of the upper limit for meal allowances for business trips lasting 5-12 hours. In 2025, a meal allowance of CZK 123.90 per shift (or per calendar day for employees who do not have a set shift) is thus exempt from tax.  

Meal allowances may have non-financial form, i.e., meals for consumption at the employee's workplace (company canteen) or meals provided by another entity (meal vouchers), or financial form, i.e., monetary meal allowances. The employer does not have to provide the employee with only one form of meal allowance but may combine them as desired.  

However, the limit is cumulative, so it is necessary to include in the exemption limit all forms of meal allowances that the employer provides to the employee during a shift. Thus, if the employer first provides the employee with a full breakfast at the workplace during a shift and then a meal voucher for lunch, the allowances must be added up and then compared with the exemption limit. 

With the introduction of the exemption limit, the administrative burden of monitoring the tax implications of the allowances on the employee’s part has increased. The opposite is true for employers: all meal allowances can now be considered fully deductible for income tax purposes on the employer's part, regardless of whether they are provided within or above the limit, as long as the employees' entitlement arises from a collective agreement, the employer's internal guidelines, an employment contract or another contract. In our opinion, these are expenses related to the working and social conditions of employees. 
 

Meal allowances and business trips

For the meal allowance to be exempt from income tax on employment within the given limit, two additional conditions must be met: 

• the employee must have worked at least three hours per shift (or calendar day) and 
• during the shift, the employee must not be entitled to an obligatory meal allowance for business trips under the Labour Code. 

We illustrate the fulfilment of the second condition with an example: 

An employee works a shift from 8:00 a.m. to 4:30 p.m., and at 10:00 a.m. they leave on a business trip. After five hours (i.e. at 3:00 p.m.), the employee becomes entitled to an obligatory meal allowance for business trips under the Labour Code. Since the entitlement to that meal allowance arose during the shift, the employee is not simultaneously entitled to an exemption of the meal allowance voluntarily provided by the employer as a benefit from income tax. If the employer nevertheless provides such meal allowance (e.g. gives the employee a meal voucher for the shift as on other days), the value of the meal voucher will be taxable income for the employee and will also be subject to mandatory insurance contributions. However, if the employee leaves for a business trip later that day, and the entitlement to the obligatory meal allowance under the Labour Code only arises, e.g., at 6 p.m., the employee will retain the entitlement to the exemption of the voluntary meal allowance from income tax and at the same time will be entitled to the obligatory meal allowance under the Labour Code that would normally not be taxable for the employee (within the limits set by the Labour Code). 

The employer may treat these expenses as tax deductible in both cases, depending on the specific details of how the employee's entitlement to meal allowances is defined by the employer.   
 

Second meal allowance

If the length of an employee's shift (or working day), including a break provided by the employer, exceeds 11 hours, the employee is entitled to a second tax-exempt meal allowance (in the same amount as the first). The General Financial Directorate has confirmed that each allowance must be assessed separately in relation to the exemption limit. 

Example: 
An employee has a 13-hour shift. As their first meal allowance, they received a lunch voucher worth CZK 100. Subsequently, as a second allowance, they received an evening meal worth CZK 140. In 2025, both allowances must be compared with the exemption limit of CZK 123.90. The dinner allowance exceeds the limit, and the proportional part of the allowance is therefore taxable income for the employee and subject to mandatory insurance contributions. 
 

Meals for former employees – old-age and disability pensioners

In July 2024, an amendment to the Income Tax Act introduced a retroactive tax exemption for meals provided to former employees, for the entire calendar year. However, this only applies to meals provided in a company canteen (operated directly by the employer or an external supplier), not the provision of a multi-purpose meal voucher or a monetary meal allowance.  

Furthermore, the exemption can only be applied to former employees who worked for the employer in question before retiring on an old-age or third-degree disability pension (i.e. the employer from whom the employee retired). The exemption limit for this allowance is the same as the exemption limit for current employees (CZK 123.90 in 2025). 
 
The amendment has thus removed the unintended taxation of meals for former employees. As regards the tax deductibility of expenses for meals for former employees, we are inclined to believe that these expenses are tax deductible on the employer’s part.
  

Light refreshments, business/working lunches and coaching lunches

According to the GFD’s Methodological Information, the provision of light refreshments to employees for consumption at their workplace is not considered a meal allowance. These must be foods that do not reach the intensity of a main meal, such as light refreshments at work meetings, workshops, company training sessions, etc. Examples of light refreshments are yoghurts, sandwiches, fruit, or pastries. If the conditions are met, light refreshments are not subject to tax for employees, and their value is not included in the exemption limit. For employers, these are non-deductible expenses. 

Apart from light refreshments, the GFD also commented on working lunches (or breakfasts and dinners). Although these involve the provision of a main meal, the same rules as for light refreshments apply, and such meals are therefore exempt from tax for employees. For employers, the expenses are non-deductible as entertainment expenses.  

In accordance with the GFD’s interpretation, only events attended by third parties (business partners, clients, etc.) fall into the category of business meals. Coaching or other group lunches (as well as breakfasts or dinners) among employees only, if paid for by the employer, are considered standard meal allowances exempt up to a set limit. 
 

Valuation of benefits in form of meals at company canteens

A problematic area for employers may be determining the price of meals, and subsequently the amount of the meal allowance, if the meal is provided in a company canteen.  

According to the GFD, in the case of company canteens, it is generally possible to determine the amount of the allowance based on the price charged to third parties (where the canteen is used not only by employees or former employees, but also by the public). 

If the canteen is intended solely for employees, it is possible to determine the meal allowance amount using the comparable independent price method or the cost+ method. For the cost+ method, it is necessary to include ancillary operating indirect costs in the price of the meal, i.e., the wages of the employee serving lunch, energy costs and depreciation, but not general administrative overheads (e.g. the wages of the payroll accountant).