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meal allowance home and abroad - uk & ireland

Meal Allowance Rates in 2022: Home and Abroad – UK & Ireland

When planning a business trip or event, understanding meal allowance rates, room allowance rates and taxable responsibilities is key. HM Revenue & Customs (HMRC) allows for subsidies on meal allowance, overnight rates, and travel expenses. And this really is a win-win situation for both the company and the employees. Companies can set a daily budget per employee, reducing time spent on administrative tasks and paperwork. As long as the employees stay within budget, HR doesn’t need to go through every single invoice and approve every transaction. Companies whose employees travel a lot, can even agree on a set rate with HMRC and optimize their costs even further. Not to mention the positive impact employee allowance and meal benefits have on the well-being of your staff.

Per diem rates vary depending on location, workplace, working day and the number of hours worked. Let’s take a look at what meal allowance is as well as the associated tax and national insurance standards.

Please note that set rates do change year by year. The rates referred to in this article, are as of January 2022.

What is Meal Allowance?

A meal allowance is a common benefit for employees. It can also fall into travelling allowance or scale rate payments. Either way, the idea is to reimburse an employee for the cost of meals occurring during work hours. In the UK, it’s one of the most popular employee benefits.

In essence, food allowance rates are the amount that employees can spend on meals and lodging trips. And HMRC provides a table of suggested amounts and taxable obligations that can be applied depending on various factors.

Employee Benefits for Corporate Travels

Travelling and attending work activities can be expensive, especially if you have to pay for your own food and drinks while you’re away. But fortunately, in the UK, there are standardized rates for dealing with food insurance. 

The amount you choose to pay for meals will depend upon how much the employee would have spent on food and how far away from home they were.

You should also bear in mind that there are special rules regarding meal allowances depending on which country the employee was visiting, or whether they were travelling within their own country but staying overnight.

HMRC Meal Allowance Rates

The U.K.’s tax authority has specified amounts that can be deducted as business travel and subsistence expenses, depending on the distance travelled and the employee’s work contract.

You can plan business trips and in-workplace meals following the HMRC meal allowance recommendations to deduct these taxes as business expenses.

Business expenses are exempt from tax and National Insurance fees, which means you can save on food allowance if you can prove it’s for business purposes.

If you’re planning to offer on-site food or cover the cost of meals for your permanent employees on a business trip, there are some guidelines to consider:

  1. Meal allowances for business trips
    Since 1998, meal allowances for business travels are exempt. Payments and meal vouchers made to cover the costs of training and other business-related events can be considered business expenses.
  2. How to calculate meal allowance rates in 2022
    If you’re planning a domestic business trip, you can check if you meet the conditions to claim tax relief and if your rates are reasonable based on the HMRC estimate of expenses.

National Rates

Minimum journey time Meal allowance maximum amount
5 hours £5
10 hours £10
15 hours (and ongoing at 8 pm) £25

International Rates

If the employee is travelling outside the UK, you must check the rate expenses for accommodation and subsistence overseas. The map bell0w shows meal allowance rates per city for a normal working day – over 5 hours and under 10. We highlighted the rates in some of the most frequent business travel destinations.

meal allowance and employee benefit abroad

In the tables below we also included both, subsidised meal allowance rates and room rates for UK’s top business travel destinations (please note that the values in the tables below are in USD):

United States

City Over 5 hours Over 10 hours 24-hour rate Room Rate
Atlanta 30.50 75 98.50 127
Boston 32 76.50 97.50 239
Chicago 34.50 84 112.50 198
Houston 24 66.50 88 113.50
Los Angeles 28.50 72 93 193
Miami 28 75.50 98.50 221.50
New York 31 76.50 102.50 216
San Francisco 21 71.50 99.50 190.50
Seattle 24.50 62 81 184
Washington D.C. 30.50 70.50 91.50 177

France

City Over 5 hours Over 10 hours 24-hour rate Room Rate
Lyon 28 73 79.50 122
Marseille 28.50 86 92.50 190.50
Paris 40 86.50 117 199.50
Strasbourg 24 59.50 80.50 108

Spain

City Over 5 hours Over 10 hours 24-hour rate Room Rate
Barcelona 28 76 101.50 176
Madrid 32 86 114.50 172.50

Germany

City Over 5 hours Over 10 hours 24-hour rate Room Rate
Berlin 22 65.50 72 167.50
Dusseldorf 23 59 66 110.50
Munich 29 73 79.50 147

Netherlands

City Over 5 hours Over 10 hours 24-hour rate Room Rate
Amsterdam 25 65 72 150
The Hague 29.5 87.50 117.50 163.50

What Foods are Nontaxable?

According to HMRC, tax subsidies for meals that aren’t on a reasonable scale or are provided in a restaurant are unlikely to be exempt. Besides, you must consider which part of the staff will be benefitting, as it won’t be considered a business expense if it’s restricted to a certain group of staff members.

As a company, you might need to deal with higher per diem rates for directory members and executives, but you need to consider that if their rates are surpassed the company will need to pay tax.

In addition, if you’re offering vouchers that are exchangeable for money, these can’t be included on your expense reports as business expenses.

Remuneration Arrangements and Food Allowance

On the other hand, if your employees are working under a salary sacrifice or flexible remuneration arrangements (such as a zero-hour contract), meals are not exempt from taxes and can’t be considered business expenses.

To manage all of your employee contracts, documents, and events in one place, we would recommend a dedicated and customized employee portal. It will allow you to effectively assign documents to be signed digitally yet legally and track your business-related expenses.

In the case of working with a self-employed individual, they are also allowed to claim daily food allowance if they go on a business trip. This means that you won’t need to cover these business expenses while working with freelancers and independent workers.

Just as you report your spendings to the UK’s tax authority, you also need to submit free or subsidized meals that aren’t exempt at the end of the tax year. This is done by sending P11D and P11D(b) forms.

Scale Rate Payments

If your company offers cash to pay employees’ business costs, it’s considered a scale rate payment. To set scale rate payments, you can use the HMRC table of benchmark scale rates:

Description Up to
Breakfast rate £5
One meal (5 hour) rate £5
Two meal (10 hour) rate £10
Late evening meal rate £15

Exceptional cases such as employees leaving home earlier and working later than usual are covered on these benchmark scale rates. But one-meal and two-meal rates are intended to pay costs for business travels and must meet qualifying conditions.

Meal Allowance and Travel Subsidies in Ireland

Employee benefits in Ireland are usually subject to income tax, including benefits-in-kind. These refer to benefits with monetary value even though they cannot be converted to money (ie. access to a company car, accommodation, etc.).

Remote work or teleworking most often implies using a computer to work from home. This as well as other relater computer equipment are not considered benefits-in-kind as long as they are primarily used for business purposes. 

meal allowance travel subsidies - employee benefits uk ireland

Non-taxable Meal Allowance 

Similarly to the UK, if the company provides a staff canteen with free or subsidised meals, which are available to all of your employees, then these meals are not subject to tax. If they are, however, only offered to certain employees then they are taxable. 

Seasonal parties, entertainment expenses, inclusive events, special occasion meals, sports days etc. are also not taxable, provided that the expenses are reasonable. 

Taxable Meal Allowance

You may also provide meal vouchers which are taxable Benefit in Kind (BIK). As in the case of only offering canteen to set employees, the employees must pay Pay as You Earn (PAYE), Pay Related Social Insurance (PRSI), and Universal Social Charge (USC). The amount is based on the value of the benefit which is the face value of the benefit or voucher less 19c.

Food allowance rates and other subsistence expenses are attractive benefits for employees, and companies must be prepared to face tax responsibilities related to those perks. And although the dynamics might change across organizations, UK & Ireland both have clear guidelines to reduce paperwork while increasing employees’ satisfaction with your company.

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