What is the difference between providing a meal and a meal paid for with an employer-provided payment card?
Meal
When an employer provides a free meal to an employee, it is wages in kind for payroll tax purposes. And if the meal provided in the workplace is consumed, a lump sum applies for the valuation of that meal: the meal (breakfast, lunch or dinner) must (in 2026) be subject to wage tax at €4.05. This lump sum applies even if the actual cost of the meal is less than €4.05.
For a meal that outside the workplace is consumed, the invoice value (the value shown on the invoice issued to the employer for the meal) must be included in payroll tax.
When the employee pays a personal contribution, it is deducted from the (flat-rate or invoice) value of the meal. On balance, however, this cannot create a negative value.
The value of a meal can generally be designated by the employer for the free space of the work-related costs scheme. Insofar as the (fixed) value of the meal, with all other allowances and benefits in kind accommodated in the free space, does not exceed the free space, no payroll tax will then be due. Over the amount of the excess of the free space, the employer pays 80% payroll tax in the form of final levy.
Payment card
The story becomes different when the employer does not provide the meal, but rather a (digital) payment card with a credit balance made available by the employer, which the employee can use to purchase meals. In that case, there is no pay in kind, but pay in cash. Wages in cash obviously do not have to be valued: the amount paid with the payment card is included in the payroll tax levy.
The Inland Revenue explained this in a knowledge group position. In the case assessed by the knowledge group, the payment card can be used not only in the company restaurant, but also at designated restaurants and delivery services.
