Food Coupons

Meaning & Definition

Food coupons are meal benefits given to employees as part of their compensation package or benefits program. Employers offer the coupons to be used by the employees for employment-related purchases of food and non-alcoholic beverages at authorised retail stores or through authorised online ordering sites. Employers frequently use food coupons for income tax purposes, since they are a more economically usable method of providing for employee welfare and providing funds for employee meals.

Importance of Food Coupons 

• Provides a daily meal allowance as part of employee satisfaction. 
• Enables a tax-efficient method of structuring eligible salaries for employees receiving regular benefits.
• Contributes to overall employee satisfaction through practical employee benefits.
• Creates a work-life balance for employees by lowering their day-to-day expenses.
• Contributes to the overall value proposition of the employer through the compensation and benefits package offered to employees.

Legal Compliance 

Tax provisions regarding meal benefits define regulations on food coupons.

It is the employer’s responsibility to ensure:

• Correct tax treatment according to prescribed limits and usage guidelines.
• Record keeping and payroll compensation reporting.
• Provisioning food coupons through an approved meal benefit vendor.