Meal allowance: Overview, definition, and example
What is a meal allowance?
A meal allowance is a sum of money provided by an employer or organization to an employee to cover the costs of meals during work hours or when traveling for business. Meal allowances are typically given when an employee is required to work beyond regular hours, travel for work, or attend business meetings or events that include meal expenses. The allowance may be provided as a daily stipend or a reimbursement for actual meal expenses incurred.
For example, a company may provide a daily meal allowance of $30 to an employee who is traveling for a business conference.
Why is a meal allowance important?
A meal allowance is important because it helps employees manage meal expenses while they are working in situations where regular meal options are not available. It supports employee satisfaction by ensuring that employees do not need to pay out of pocket for meals during business-related activities, and it can be a useful benefit for those who travel frequently for work.
For businesses, offering a meal allowance can increase employee morale and contribute to a positive work culture. It can also be beneficial for controlling meal-related expenses during business trips or extended work hours. For employees, meal allowances reduce financial strain and help ensure they are properly compensated for meals required for business purposes.
Understanding meal allowance through an example
Imagine an employee is sent on a business trip to another city for three days. The company provides a meal allowance of $50 per day to cover breakfast, lunch, and dinner expenses. The employee can use this allowance to purchase meals, and any unused portion can either be retained or returned to the company depending on the company’s policy.
In another example, a sales representative who works in the field and travels to client meetings may receive a daily meal allowance of $25 to cover meals when they are out of the office. This ensures that the representative does not need to bear the costs of meals while working away from their primary work location.
An example of a meal allowance clause
Here’s how a meal allowance clause might appear in an employment or business agreement:
“The Employer will provide a meal allowance to the Employee for each full day of travel required by the Employer for business purposes. The meal allowance will be $X per day, intended to cover the costs of meals while traveling or working outside the employee’s normal work location. Any unused portion of the meal allowance may not be carried over and is non-refundable.”
Conclusion
Meal allowances are a valuable benefit that helps ensure employees are properly compensated for meal expenses incurred during work-related activities. Whether for business trips, overtime, or client meetings, meal allowances can reduce financial burden and improve employee satisfaction. For businesses, clearly defined meal allowance policies provide transparency and ensure that meal-related costs are managed appropriately. Including clear meal allowance clauses in employment agreements helps establish expectations and minimize misunderstandings.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.