Meal Allowances: What You Need to Know

Fuel your people to do their best work.

Meal allowances, also known as food stipends are a relatively old concept. Depending on a position within an organization, some companies would give their people meal stipends to use when taking out  customers or prospective clients.

Fast forward today, the idea of a meal stipend has transformed quite a bit. Meal stipends are picking up steam as an idea because organizations that once catered in-office lunch or snacks for their people, are now looking to more inclusive ways to support their needs.

We developed this guide to give you everything you need to know about meal stipends.

Here's what is covered in this guide:

  1. What is a food stipend
  2. Examples of food  stipends
  3. What people spend their food  stipends on
  4. Benefits of food stipends
  5. Finding the budget
  6. How to create one for your organization

What is a meal allowance?

First, a definition:

A meal allowance, or food stipend, is a sum of money given to employees for them to use to purchase on food. 

Food can be used for meals like lunch or dinner, or items like snacks, groceries, and beverages that will make their working experience more convenient, healthy, productive, and supported.

The data on who offers meal allowances

According to a 2019 Talent Market Report, both small and large companies are likely to offer meal allowances with small companies offering them 17% and large companies 37% of the time when they're unable to match a candidate's desired salary.

We've added the graphic from their report below to highlight their research.

Other alternative incentives include customized benefits, profit sharing, cell phone reimbursement, customized training and development, remote work flexibility, increased vacation, better job title, and more.

Examples of Meal Allowances

Below are a few examples of top companies supporting their people with food stipends:

1. MasterClass

MasterClass offers their employees $120/month as an interim snack stipend.

2. Snapchat

Snapchat gives their people $16/day for food.

3. SAP

Depending on the office, SAP would provide in-house catered meals or a food stipend.

4. Webflow

Webflow has not set a meal-only stipend, but they do have a "Remote Work Stipend" which includes the option to buy food, tech, and productivity-related items.

5. Lose It!

Lose It! gives their employees $100 to spend on lunch delivery.

What do people spend their meal stipend on?

  • Breakfast, lunch, or dinner 
  • Snacks for their home office
  • Coffee, tea, and other beverages
  • Groceries 
  • Smoothies
  • Juices
  • Takeout or delivery
  • Healthy food kits such as Blue Apron and Purple Carrot
  • Healthy prepared food options such as Freshly

Benefits of food stipends

There are plenty benefits to offering your people a meal allowance, below we highlight the most common five.

Happier people and increased productivity

Your people will purchase the food they genuinely need to make their remote work life easier and more comfortable. When people can easily refuel in ways that satisfy their convenience, tastebuds and dietary needs, they're happier and more productive.

Attract & retain talent

Catered meals were a staple in many offices across the nation pre-COVID. However, how many companies have been able to continue this since COVID began? Not too many.

As this Protocol piece points out, people are mourning the loss of their free lunches and snacks. You can stand out against the crowd by adapting and offering a food stipend today.

Equitable & inclusive

Today more than ever, people's diets are varied due to preferences, intolerances, and allergies. With a food stipend you can support everyone, regardless of whether they're paleo, vegetarian, vegan, gluten-free, dairy-free, and more.

Cost-effective

If offering free lunches or meals to your people is a priority, this is one of the most cost-effective ways to do so.

Catered meals on-site are a thing of the past and it is also a time-consuming process to make sure the right amount of food is delivered, at the right time, while also ensuring people have the food they need (e.g. paleos, vegetarians, vegans), and the office space is cleaned up afterwards.

Food allowances allows people to get the food they want while sticking to a budget, and without worrying about the time or costs of cleaning-up.

Scalable

A food stipend is an easy and scalable way to set your people up with the food they want. Additionally, the right software can also help ensure that taxes are accounted for.

perk stipends

Learn more about the benefits of general perk stipends & lifestyle spending accounts.

Download the free eBook to find out why perk stipends and lifestyle spending accounts have become the most common new perk.

How to set up a meal stipend:

There aren't a lot of steps to set-up a meal allowance. Below we break them down into two steps.

1. First determine how much you want to offer your people, within what timeframe.

Look to the examples above if you need inspiration. 

Keep in mind, you don't need to offer a lot of money to make a big difference.

2. Decide how you’ll manage the program.

Most common options include:

  • Managing the process manually. 

If you choose this option, be prepared to set up a process to track purchases, receipts, balances, approval and paid-out food perks, as well as rejections or ones which need further review. Consider using Google forms to track submissions, excel or Google sheets to track progress, and be sure to create a process to track the nontaxable vs taxable (for IRS compliance). Yes, food perks are taxable!

  • Select an expense software to manage it.  

Expense software solutions like Expensify and Concur are largely meant for business expenses which these are not.

If using this option, make sure every employee has access to your company's expense software option, and have a way to track the taxes for each employee and their individual meals.

  • Or select a perk software to manage it.  

Options for perk stipend solutions have grown tremendously over the past few years as more people turn to inclusive and flexible options for their people.

This kind of software can be especially helpful if it communicates your program to your team members, track their balances, and spending. It's best when this information is at their fingertips, as it's helpful for them and also alleviates you and their managers for requests for balance updates.

! Keep in mind that food allowances are a taxable benefit. !

Download our 'Perks Software Buying Guide' to find the right perks for you and your team

Whether it's selecting individual perks, vendor aggregators, discount platforms, debit cards, or stipends -- our goal is to help you select the best perks program for your situation.

How to find the budget for a meal stipend

At first glance, it might feel like you have to create new budget for this, and while that might be the case, there may be other options.

Option 1: Create new budget

If you've already decided this is an important endeavor for your company and it's people, then you're set! 

If using a perk solution, be sure to count this cost into the budget. Or if you're managing them manually, you need to find a way to quantify this cost as well since the cost of time and labor to manage these is often a more hidden cost which will fall on HR.

Option 2: Transition existing food or snack budgets

Offering on-site catering for your people is a thing of the past. If that budget is still available, transition this money into a meal allowance.

Option 3: Transition existing perks 

According to a recent SHRM report, about one third of companies plan to extend the option for remote work into the future.

It's unlikely that any company will continue to have the same level of perks they had pre-pandemic post-pandemic. If you're looking for a way to continue serving your people in meaningful ways, transition the perk money into a meal allowance, or even a remote work stipend or general perk stipend.

Additional resources:

Other types of stipends

There are more stipends than just a meal allowance. Do a Google search for “top perks” and inside almost every list are a surprising number of perk stipends.

So what are the other types of stipends or allowances?

In addition to equipment and tech stipends, there are other types of stipends that companies offer their people. These types types of stipends or allowances make it possible for companies to offer more perks, with less money and ensure that they're personalized to meet the needs of their people. 

See how Compt can help

Let's connect to see how a meal allowance would work at your company, and how it can help your company achieve even greater success.