Lunch and mid-shift meals do not have to be paid for social insurance? Is it included in personal income taxable income or is it included in deductible expenses if the prescribed conditions are met? What is the current maximum limit for lunch and mid-shift meals?
1. Lunch and mid-shift meals do not have to be paid for Social Insurance
Pursuant to the provisions in Clause 3, Article 30 of Circular 59/2015/TT-BLDTBXH:
Article 30. Monthly salary paid for compulsory social insurance
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3. Monthly salary paid for compulsory social insurance does not include other benefits and benefits, such as bonuses as prescribed in Article 103 of the Labor Code, initiative bonuses; Mid-shift meal ; Subsidies for gasoline, telephone, transportation, housing, child care, and child care; Support when employees have relatives who die, employees whose relatives get married, employees’ birthdays, allowances for employees facing difficult circumstances when suffering from work accidents, occupational diseases and Other supports and allowances are recorded in a separate section in the labor contract according to Clause 11, Article 4 of Decree No. 05/2015/ND-CP dated January 12, 2015 of the Government detailing and guiding implementation. enforce some contents of the Labor Code.[…]
Thus, lunch and mid-shift meals will not be subject to Social Insurance if these amounts are recorded as separate items in the labor contract.
For example:
In the salary clause of the labor contract, the enterprise specifically records the monthly salary including:
– Seniority allowance: 1,000,000 VND;
– Mid-shift meal fee: 600,000 VND; etc
So, in this case, mid-shift meals will not be counted as social insurance contributions.
If the enterprise pays the employee a salary, it includes mid-shift meals and lunch. But in the salary clause in the labor contract, the business only writes: The employee’s salary is 12,000,000 VND/month (without specifically stating as above). Then, the business will calculate the insurance payment on the entire salary of 12,000,000 VND.
In short, correctly calculating social insurance contributions depends on how the business records wages in the labor contract. If the enterprise does not identify the components but only records the total salary, the insurance payment will be calculated on the entire salary amount.
2. Lunch and mid-shift meals are included in taxable income Personal income if it exceeds 730,000 VND/person/month
Pursuant to the provisions in Clause 4, Article 22 of Circular 26/2016/TT-BLDTBXH, enterprises set a maximum mid-shift meal payment for employees that does not exceed 730,000 VND/person/month.
And Pursuant to the provisions in Item g.5 Point g Clause 2 Article 2 of Circular 111/2013/TT-BTC:
Article 2. Taxable income
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g.5) Mid-shift meals and lunches paid by the employer for organizing mid-shift meals and mid-shift lunches for employees in forms such as directly cooking, buying meals, and issuing meal vouchers.
In case the employer does not organize a mid-shift meal or lunch but spends money on the employee, it will not be included in the individual’s taxable income if the level of expenditure complies with the guidance of the Ministry of Labor and War Invalids. and Society. In case the spending level is higher than the guidance level of the Ministry of Labor, War Invalids and Social Affairs, the excess spending must be included in the individual’s taxable income .
Thus, in case the company pays for lunch or mid-shift meals for employees each month: this amount will not be included in personal income taxable income if it does not exceed 730,000 VND/person/month. In case the expenditure level is higher than prescribed, the excess expenditure must be included in taxable income.
3. Lunch and mid-shift meals are included in deductible expenses if they meet the prescribed conditions
First, for lunch and mid-shift meals to be included in the enterprise’s deductible expenses, these expenses must be specifically recorded in terms of benefits and benefit levels in one of the documents such as: Labor contract ; Collective labor agreement; Financial regulations of Companies, Corporations, and Groups; Bonus regulations are prescribed by the Chairman of the Board of Directors, General Director, and Director according to the financial regulations of the Company and Corporation according to the provisions of Article 4 of Circular 96/2015/TT-BTC (amended). changed by Clause 2, Article 3 of Circular 25/2018/TT-BTC).
In addition, businesses also need to provide additional valid invoices and documents as prescribed in Article 4 of Circular 96/2015/TT-BTC such as: payment slips, shift meal marking sheets, etc.
4. Regulations on the maximum amount of money for lunch and mid-shift meals
According to current regulations, there is no limit on the amount of money for lunch or mid-shift meals. Thus, depending on economic conditions and nature of work, businesses can freely regulate the amount of lunch and mid-shift meals.
Note that, although expenses for lunch and mid-shift meals will be included in the business’s deductible expenses if they meet the conditions; However, these expenses will be included in the employee’s taxable income if they exceed 730,000 VND/person/month as mentioned above.
