One of the ways in which an employer can improve working conditions in his company is the efficient use of the social fund. The funds in it are used for the care of employees. The employer can thus provide them, for example, an allowance for transport to work, recreation, and also provide an allowance for meals - in an unlimited amount with tax exemption.
Employee benefits are an important part of companies. They motivate employees, take care of their needs and improve working conditions. One of the employee benefits is a meal allowance from the social fund. How can you make the most of it?
What is a social fund?
The social fund is a financial instrument that the employer obligatorily creates to support employees in various areas. This fund can be made up of mandatory and voluntary contributions from the employer. Its purpose is to improve the social and working conditions of employees, support their physical and mental well-being, and also provide various benefits, which include meals.
Creation of a social fund according to the law
According to the current legislation, the employer is obliged to contribute at least 0,6% of the employees' gross wages to the social fund. If the company has reported a profit and fulfilled all tax obligations, it can add a voluntary contribution of up to 0,4%. In addition, other resources may be added to the fund, such as donations or subsidies provided to the fund by the employer.
Unlimited and tax-free meal allowance
One of the most common forms of using the social fund is a contribution for employee meals. This contribution can be provided beyond the scope of legal obligations and represents non-taxable income for employees. If the employer complies with all the requirements arising from the Labor Code, it can provide the employee with an allowance for meals in an unlimited amount. The allowance for meals allows the employer to efficiently use the fund's resources and minimize his tax burden.
Example: How to implement a meal allowance from the social fund
The employer contributes to the employee's meals with a contribution in the amount 9 €. If he provides meals in the form of vouchers, he can contribute to the employee the full amount, which is exempt from tax and levies, as follows: the employer contributes the legally stipulated 55% (of the value of the meal allowance €8,30), which is 4,57 €. The rest 4,43 € can the employer contribute from the social fund. This contribution will be exempt from tax and levies.
Advantage for the employee: The employee will receive a contribution in full value 9 € for meals, while this income is exempt from tax and levies.
Advantage for the employer: The employer covers the contribution 4,57 € from operating costs that are tax deductible and the rest 4,43 € from the social fund. The contribution from the social fund is tax-advantageous for the employer, as the social fund is created from gross wages and voluntary contributions, which do not affect income taxation.
With a meal allowance from the social fund, the employer can effectively optimize its costs and legally reduce tax and levy costs.
Easy drawing of contributions from the social fund thanks to Edenred
The Edenred meal card makes it easy to draw allowances for meals. The employer adds all contributions directly to the employee's meal cards, giving them maximum flexibility. Transactions are processed immediately and employees can check their balance in the MyEdenred application or find the nearest store where they can use the card. They offer more than 34 acceptance points throughout Slovakia (of which over 000 are for meal cards).
