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How to set up a meal allowance for your employees

Small Business • April 6, 2023 at 9:07 AM • Written by: Holly Bengfort

At some point during the workday, employees will experience the same feeling: hunger. Whether they’re looking for a quick snack to hold them over or a whole meal to satisfy their cravings, food costs cut into their paycheck. An easy way for employers to show they care about their employees is to offer them meal allowances.

Consider this scenario: your employee is working hard on a report that another department needs by the end of the day. It’s lunchtime, and they could use a pick-me-up to finish their day strong. They don’t want to spend a portion of their break driving home or going out of their way to pick up food. They’re also trying to save money.

If your organization offers a daily meal allowance for food delivery services, two of their problems are solved at once. The food gets delivered, your satisfied employee can use their full meal break to enjoy their meal before getting back to work, and you foot the bill to show your appreciation for their dedication to the company.

This article will explore the different options for a meal allowance benefit and how to start offering one of your own.

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What is a meal allowance?

A meal allowance, sometimes called a food allowance, food stipend, or meal stipend, is considered a fringe benefit. It’s a set amount of money employers give to employees to buy food, such as meals or groceries. Organizations can offer this meal benefit as a recurring daily, weekly, or monthly perk or a one-time allowance for special occasions. Food perks are generally a taxable benefit for employees.

Why should I offer a meal allowance?

The rising cost of food

You can’t ignore the effects of inflation. Prices are increasing at the grocery store on everything from milk and eggs to chicken and beef. People are also spending more money when they go out to eat, so it’s impossible to avoid dropping more cash on food.

The U.S. Department of Agriculture1 (USDA) reports that in 2022, food prices increased by 9.9%. Food-at-home prices increased by 11.4%, while food-away-from-home prices increased by 7.7%. All food price categories tracked by the USDA Economic Research Service (ERS) increased by more than 5% in that same time span.

While recent reports from the USDA and Consumer Price Index show that food prices decreased 0.2% from October to November 2023, prices remain high.2

As an employer, you can help to alleviate some of this financial strain by creating a meal allowance policy for your employees.

Meals during business-related travel

Meal allowances are also common for business-related travel, so employees can be reimbursed for their expenses. While meal reimbursements for travel are tax-free, this type of allowance could have tax implications if you go over the federally approved rate.

Some states, like California, require meal reimbursement for travel, so you’ll want to consider your own state’s regulations on the matter. Even though the majority of states don’t require reimbursements for business-related travel expenses, meal allowances are still a great option for employee retention.

What type of meal allowance should you offer?

The beauty of a meal allowance is that you get to choose what it looks like. Do you want to offer a break on weekly runs to the grocery store? How about covering lunch daily for your employees? The choice is yours.

But before you design your meal benefit, consider your budget, company size, employee desires, and needs when choosing your food stipend. You have the freedom to offer your employees an allowance for snacks, meals, groceries, or food delivery to the main office or even their house if they’re working remotely.

Including the cost of meals in your organization’s benefits package

Several companies like Google are known for offering free corporate catering to employees while they’re working at the office, but a meal allowance works differently. It can be more cost-effective and flexible and give your employees some liberty over what they choose to eat. This can be especially helpful for employees who have dietary restrictions.

According to PeopleKeep’s 2022 Employee Benefits Survey Report, 82% of employees say that the benefits package an employer offers is an important factor in whether or not applicants accept a job with that organization. Many employers choose to offer meal stipends to boost employee morale and productivity.

One Grubhub survey3 found that 60% of employees equate company-provided food with feeling more valued and appreciated. It also found that more than half said a free lunch “would strongly influence their decision to accept a job offer.” Adding meal expenses to your benefits package is a way to attract and retain top talent.

That alone could be why several companies choose to include a meal allowance as part of their benefits package. This supplemental benefit can go alongside other perks such as health reimbursement arrangements (HRAs), wellness benefits like gym memberships, and cell phone and internet access reimbursement.

Below are some businesses4 already offering meal allowances.

Here’s how they choose to do it:


Meal allowance

Snap Inc.

Snap Inc. employees get a Snap Meal Card with a daily stipend of $16. They can use the food allowance card at restaurants and for meal delivery services.


Masterclass employees get a $120 monthly stipend for snacks and lunch.


Since going remote, Stash periodically offers its employees free lunches and sweet treats as perks.

Ribbon Health

Ribbon Health offers a generous lunch stipend for days its employees work in the office.


Valon gives most of its employees a generous lunch stipend.

What might employees spend this money on? Some eligible foods include:

  • A latte and pastry from their favorite coffee shop
  • A salad or fresh fruit that compliments their healthy lifestyle
  • A cookie to treat themselves for a job well done
  • A protein-packed smoothie when they’re on-the-go
  • A food delivery service that delivers monthly package food kits such as Hello Fresh or Blue Apron

Meal allowances for travel expenses

If your employees travel for business meetings or conferences, that’s a different story. Whether your employee is a few hours from home or going on an overnight stay, you can expect them to spend some money along the way.

In this situation, you can still provide a meal stipend for all their business-related meals, such as breakfast, lunch, or dinner. However, per diem rates are a separate way to reimburse an employee for a business expense that comes up while traveling. You want to have your meal allowance policy in place for employees to reference before they head out the door.

The federal Meals & Incidental Expenses (M&IE) rate is used as the standard rate for business-related meal allowances. For travel in 2022, the rate for most small localities in the United States was $59 per day.

Here are the basics of a per diem allowance:

  • A per diem reimbursement is when an organization provides a daily stipend or allowance to an employee to cover travel expenses, including meals.
  • Per diem rates are set by the federal government in relation to local lodging, food, and incidentals.
  • According to the IRS, per diem rates are not considered wages, making them non-taxable. However, if you choose to offer more than the federal rate, the excess is taxable for the employee.

To search 2024 per diem rates by city, state, or zip code, use the per diem tool to calculate trip allowances5 offered by the U.S. General Services Administration.


M&IE Rate




Incidental Expense







New York City






Los Angeles






Salt Lake City






How to offer and administer employee fringe benefits for meals

After you determine your budget and the meal allowance you’d like to offer, you must decide how you want to manage your benefit. You can balance this project on your own or enlist help from an employee benefits administrator to lighten the load.

With WorkPerks from PeopleKeep, you create and manage custom stipend benefits that best match your organization and the needs of your employees. Our stipend administration software allows business owners to provide custom perks to better strengthen the employee experience and promote inclusivity. With employer-set reimbursement amounts, easy-to-use dashboards, and award-winning customer support, we’ll help you care for your people so you can focus on growing your business.


A meal allowance is a fringe benefit similar to a professional development, wellness, or home office stipend. It’s a set amount of money that your employees can use to pay for food, which is a cost that would typically come out of their own wallets.

Offering a meal benefit to your employees can greatly improve company culture and success. Not only has it proven to be an effective tool in employee retention, but it can also bring in new talent looking for a competitive benefits package that fosters their financial, physical, and emotional well-being.

Ready to take the hassle out of managing reimbursements? Schedule a call with a personalized benefits advisor today!

  1. https://www.ers.usda.gov/data-products/food-price-outlook/summary-findings/
  2. https://www.ers.usda.gov/data-products/food-price-outlook/summary-findings/
  3. https://corporate.grubhub.com/blog/why-meal-allowances-are-a-cost-effective-employee-benefit/
  4. https://www.builtinnyc.com/
  5. https://www.gsa.gov/travel-resources

This blog post was originally published on March 1, 2023. It was last updated on January 9, 2024.

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Holly Bengfort

Holly is a content marketing specialist for PeopleKeep. Before joining the team in 2023, Holly worked in television news as a broadcast journalist. As an anchor and reporter, she communicated complex stories to the vast communities she served on a daily basis. Her background has given her a greater understanding of people and the issues that affect our lives. When Holly isn’t writing, she enjoys reading, exercising, and spending time at the beach.