Meal Allowance in Portugal in 2024: All You Need to Know
Though not mandatory in the private sector, most companies pay the meal allowance in Portugal to employees as a sort of “compensation” to support meal costs during working hours. Employers pay it voluntarily (becoming a payroll cost every month), either included in the salary or through a meal card or voucher.
Both ways are tax-exempted up to a specific value despite one of those limits being much higher. Keep reading to know the different meal allowance values in Portugal in 2024 (including their tax benefits) to ease your financial planning.
What You’ll Learn:
Meal Allowance in Portugal: What It Is and How It Works in 2024
What’s the Meal Allowance in Portugal in 2024?
Is There a Minimum or Maximum Value in 2024?
How Do the Tax Exemptions Work in a Practical Way?
How to Calculate the Meal Allowance in Portugal
Meal Allowance in Portugal: How it Works Aside from Full-times
Meal Allowance in Part-times
Meal Allowance in Remote Work
Meal Allowance in Night ShiftsThe Differences: Paying via Payslip, or in a Meal Card or Voucher
The Available Meal Cards in Portugal in 2024
Meal Allowance in Portugal: What It Is and How It Works in 2024
The meal allowance in Portugal, also known as Subsídio de Alimentação, is a benefit employers provide to compensate employees for the costs associated with meals on workdays. This allowance is mandatory for the public sector but not for the private. Despite that, it's a valuable addition to employees’ salaries as well as being tax-exempt up to a certain amount – and that’s why most private employers pay it every month.
Despite some proposals to increase the meal allowance in 2024, the value remained at €6.00 per day for public sector employees. In the private sector, the meal allowance is not a mandatory benefit, which means there’s no predetermined amount that companies must adhere to.
However, the government provides tax incentives for companies that do offer this benefit: the meal allowance is tax-exempt if it’s paid as part of the salary up to €6 per day and up to €9.60 if paid by meal card. This system encourages companies to support their employees' meal costs while offering some flexibility in providing the benefit.
So, when chosen wisely, paying the meal allowance in Portugal is tax-beneficial for employers and employees.
What’s the Meal Allowance in Portugal in 2024?
The value has stayed the same for the public sector since 2023: €6.00 per working day. Since there isn’t a mandatory law for the private sector, each company decides whether, how, and at what price to pay the meal allowance.
Regardless, the maximum tax-exempt value (from IRS and SS) for both sectors is €9.60 when paid in a meal card.
Is There a Minimum or Maximum Value in 2024?
Portuguese labor law requires public sector employees to receive €6.00 per working day. That’s the maximum tax-exempt amount when paid via the monthly payslip. The tax-exempt value increases to €9.60 when paid in a meal card.
In the private sector, there aren’t minimum or maximum values to worry about, so each employer makes the final decision. The paid meal allowance can be higher than those values in both scenarios. The only downside is that employees start paying IRS (Personal Income Tax) and SS (Social Security) from that moment.
In 2024, the meal allowance in Portugal amount may vary depending on different factors, including the industry or the company policy. Employers typically determine the meal allowance based on prevailing standards and market conditions.
How Do the Tax Exemptions Work in a Practical Way?
The meal allowance can be subject to 2 taxes: IRS (Personal Income Tax) and SS (Social Security). This happens because employees must pay taxes on what they earn every month (though the criteria change a bit for those receiving the minimum wage).
So, when an employer adds the meal allowance as a “top-up” payment, the same logic applies.
So, to ease tax payments, the Portuguese government thought of fixing some amounts – letting companies decide how to pay the meal allowance. In short, employees don’t pay taxes on those amounts when:
Paid along with their salary: up or equal to €6.00 per working day
Paid in meal card or voucher: up or equal to €9.60 per working day
How to Calculate the Meal Allowance in Portugal
Now that you know “the basics,” it’s time to do some math. This way, you’ll always know how much you can spare for this benefit (if you decide to pay it).
In Portugal, you pay your employees a meal allowance for each workday. That means you won’t pay the daily amount during periods of absence – such as vacations, sick leave, personal events (like marriage or mourning events), and situations like caring for family members or participating in strikes. Even during periods of preventive suspension or disciplinary actions, you don’t need to grant the meal allowance.
To determine the total monthly amount, you must multiply the daily allowance stated in the employment contract by the number of days worked:
If a worker has no absences during a month, they receive €9.60 per day
That means they’d receive, on average, €211.20 (€9.60 multiplied by 22, the average number of working days in a month)
Many employers pay meal allowances through meal cards or vouchers, offering employees a convenient and tax-efficient way to access this benefit. These meal cards work like debit cards, allowing workers to use them at designated establishments to buy meals – like restaurants, certain bars or cafes, food delivery companies (like Uber Eats or Glovo), or even supermarkets.
It's a win-win situation that promotes employee satisfaction and well-being. So, it’s just a matter of knowing how much you’ll have to pay each employee in advance. For that and other employment costs in Portugal, ensure you calculate every dime you spend for optimal financial strategy.
Meal Allowance in Portugal: How it Works Aside from Full-times
The situations described above imply that you employ full-time workers. But what about those working part-time? And do the same rules apply to those working remotely? Let’s analyze those and other situations.
Meal Allowance in Part-times
According to the Portuguese Labor Code, part-time employees working over 5 hours per day are also eligible for a meal allowance.
Meal Allowance in Remote Work
The Portuguese Labor Code also predicts that employees working remotely are entitled to the same rights as those working on-site. That means if you, as an employer, pay meal allowances to those working in the office, you must do the same for those working remotely.
Meal Allowance in Night Shifts
At the moment, nothing in the Portuguese Labor Code says it’s mandatory to pay meal allowances to people working night shifts. So, you can always pay it if you agree to it in the employment contract.
The Differences: Paying via Payslip, or in a Meal Card or Voucher
As you know by now, the main difference is in how much employees receive and whether they have to pay taxes (IRS and SS) for receiving the meal allowance. It all comes down to the employer’s decision, but this matter deserves extra attention.
There’s an undeniable tax advantage to paying the meal allowance in a meal card or voucher – because the tax-exempt value increases from €6.00 to €9.60.
In practical terms, and picturing a scenario of 22 working days in a month, that means that an employee earns €211.20 instead of €132 – if you pay them €9.60 per working day along with their salary, as it becomes subject to taxes (IRS and SS), along with the rest of the salary.
The Available Meal Cards in Portugal in 2024
If you found this meal card option interesting as an employer, you should start looking for the best company to provide that service for your business. In Portugal, these are the most known:
Most providers are associated with Portuguese banks. And though they seem similar, there’s much to consider when choosing the best provider for your business.
First, you should assess the breadth of their network (whether exclusive to specific providers or not), the card features (including contactless technology, compatibility with other payment services like MB WAY, amongst others), if there’s a mobile app or not, technical assistance, customer support, besides other perks you find interesting – such as discounts on specific brands and services. Book a call if you need help comparing all providers to reach a decision.
Overall, the meal allowance in Portugal in 2024 still offers flexibility for employers and employee benefits. While not mandatory for the private sector, most companies pay it to support meal costs during work days. Many meal card providers offer employers attractive options with unique features and benefits, so the choice isn’t straightforward.
We can assist you anytime, whether you want to incorporate your business in Portugal or employ workers in the country through the Employer of Record setup.
