What is the lunch surcharge? Does personal income tax count?

Are the new regulations on the level of support for lunch and shift subsidies in 2020 subject to PIT and CIT? Find out about this issue with DFC Law Firm with the advice below.

What is the lunch surcharge? Does personal income tax count?

Question: Hello lawyer, I am a garment worker at a company in Hanoi province. Working time from 8:00am to 5:00pm but the company only pays lunch subsidy of VND 700,000, so let me ask, is this lunch subsidy too little compared to the law, does this lunch subsidy charge? Thank you, Attorney.

Lawyers answer: Thank you for trusting and asking questions to DFC Attorney'sOffice, for your case, I and DFC partners would like to advise as follows

1. What is a lunch surcharge?

Lunch subsidy is the amount that the employer supports the employee in addition to the salary, using lunch support for the employee,

The amount is not required for many cases of companies and businesses. However, for a one-member limited liability company held by the State with 100% charter capital, the lunch subsidy must be in the labor contract (as stipulated in Circular 26/2016/TT-BLDTBXH).

2. Lunch rate 2020?

The lunch subsidy level is not specified in labor law. However, each company, enterprises with different economic conditions, different job characteristics, localities and can refer to circular 26/2016/TT-BLDTBXH stipulating lunch subsidies for employees working in one-member limited liability companies owned by the state 100% of charter capital, the employer can build lunch subsidies for employees in enterprises and companies.

According to the provisions of Circular 26, the current lunch subsidy for a maximum employee is VND 730,000 per month. Employers can refer to this level of subsidy to provide an employer's

So in your case, the lunch subsidy rate of VND 700,000/month that your business supports is in accordance with the law.

3. Does the case subsidy charge PIT? Does the meal charge for insurance?

Firstly, the lunch and mid-shift subsidy will not be included in personal income tax because as stipulated in Point g Article 2 of Circular No. 111/2013/TT-BTC on August 15, 2013 of the Ministry of Finance stipulating taxable incomes, including lunch and mid-shift subsidies for employees.

Secondly, lunch and mid-shift meal subsidies are also not required to pay compulsory insurance because according to Clause 3, Article 30 of the Circular 59/2015/TT-CPC, the salary is not required to pay compulsory insurance including lunch and mid-shift meals for employees

Thus,in your case, the lunch subsidy of VND 700,000 per month is not required to pay personal income tax or compulsory social insurance payment. The non-regulation of this amount is subject to personal income tax and compulsory insurance payment is very suitable, because this will help many companies and businesses support workers to eat lunch, eat mid-shift.

Note: if a one-member limited liability company is 100% state-owned by the charter of lunch and mid-shift subsidy of more than VND 730,000 per month, this more amount will be required to pay personal income tax and compulsory social insurance payment.

The above is the entire content of the consultation that DFC's partner sends to you about the issue of lunch and shift subsidies, if there are any legal issues, please contact us via the free legal advice hotline 1900.6512 for direct, free advice.