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What is meal allowance and what is its value for 2025 in Portugal?
The meal allowance is a monetary contribution whose purpose is to compensate workers for the expense of a daily meal.
The meal allowance remains an important social benefit offered by employers to help employees cover meal expenses during their workday. Starting 2025, there are updates to the tax-exempt thresholds for meal allowances, providing greater benefits to employees.
The meal allowance is considered a social benefit and is paid for by most companies. It is not mandatory by law, depending on the collective labour agreement applicable. Still, it is a very common benefit as it is not subject to taxation. The meal allowance amount in Portugal has been recently updated, registering an increase in 2023.
Key Updates for 2025:
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Updated Tax-Exempt Values (2025):
- Cash Payments: Up to €6.00 per day remain exempt from IRS and Social Security contributions.
- Meal Cards/Vouchers: The tax-exempt threshold has increased from €9.60 to €10.20 per day. Amounts exceeding these limits will be subject to taxation.
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Application:
- The new thresholds apply to 2025 payments, as approved in the State Budget.
- For payments via meal cards, employees can now benefit from a higher tax-free amount, making this method even more advantageous.
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Payment During Absences:
- Meal allowances are generally not paid during absences, such as vacations, sick leave, or other non-working days.
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Proportional Payments:
- For part-time employees working fewer hours, the allowance is calculated proportionally.
- Remote workers are entitled to the same meal allowance as on-site employees.