Can a company provide meal support to its employees without it being taxed as salary?
In Japan, cash meal allowances are generally treated as taxable salary. However, meals provided by an employer may be excluded from an employee’s taxable income when the arrangement satisfies two conditions.
Cash Allowances and Employer-Provided Meals
The form of the meal support matters.
If an employer gives an employee cash for meals, the payment is generally treated as salary. The same principle usually applies when an employee pays for a meal and the employer later reimburses the employee in cash.
A restaurant receipt alone does not make the reimbursement non-taxable for income tax.
Different treatment may be available when the employer provides meals or food directly rather than giving cash to the employee. In that case, the following two conditions must both be satisfied.
The Two Conditions
1. The Employee Pays at Least 50% of the Meal Cost
The employee must bear at least half of the cost of the meals.
For example, if the total monthly cost of the meals is ¥12,000, the employee must pay at least ¥6,000.
If the employee pays less than 50%, the employer-provided benefit does not qualify for the tax-free treatment.
2. The Employer’s Contribution Does Not Exceed ¥7,500 Per Month
The employer’s contribution must not exceed ¥7,500 per employee per month. The monthly limit was increased from ¥3,500 to ¥7,500 effective April 1, 2026.
Both conditions must be met. Satisfying only one of them is not sufficient.
Example: Both Conditions Are Met
Suppose the monthly cost of the meals is ¥12,000.
- Total meal cost: ¥12,000
- Employee contribution: ¥6,000
- Employer contribution: ¥6,000
The employee pays 50% of the meal cost, and the employer’s contribution is below the ¥7,500 monthly limit.
Provided that the arrangement otherwise qualifies as employer-provided meals, the employer’s ¥6,000 contribution will be excluded from the employee’s taxable salary.
Example: The Conditions Are Not Met
Suppose the monthly cost of the meals is ¥10,000.
- Total meal cost: ¥10,000
- Employee contribution: ¥2,000
- Employer contribution: ¥8,000
The employee pays only 20% of the meal cost, and the employer’s contribution exceeds ¥7,500.
The conditions are therefore not met, and the employer-funded amount should generally be treated as taxable salary.
Review the Arrangement Before Introducing It
A company considering meal support should determine whether it is providing meals directly or making cash payments to employees. It should also have a process for confirming the meal cost, the employee’s contribution, and the employer’s monthly contribution.
The tax treatment depends on the actual arrangement, not simply on whether the company calls the benefit a “meal allowance.”
Tax rules and administrative guidance may change, and the appropriate treatment depends on the specific facts. Please check the latest guidance from the National Tax Agency or seek professional advice.
Sources
National Tax Agency — Meals Provided to Employees
https://www.nta.go.jp/taxes/shiraberu/taxanswer/gensen/2594.htm
National Tax Agency — Cash Payments for Employee Meal Costs
https://www.nta.go.jp/law/shitsugi/gensen/03/44.htm
