This year’s holy fasting month of Ramadan has started on May 16; and like previous years we are having questions about meal allowances and other benefits provided in Ramadan.
While fasting employees are fasting and not having lunch, some employees are not fasting and continue to have their lunch during the month.
First of all there are no special arrangements for fasting and non-fasting employees in Turkey’s legislation. And it should be bear in mind that as per the Turkish Constitution and Labor Law there can be no discrimination amongst people or employees based on religion and sect. i.e. no discrimination between fasting and non-fasting employees.
SUPPLYING FOODSTUF / RAMADAN PACKAGES
* Meals provided by employers in the premises of a company or through a restaurant or a caterer are exempt from income tax and not subject to social security premium contribution. However as fasting employees don’t have lunch, some companies stop giving meal in their premises and chose to provide their fasting personnel with what can be called "Ramadan Packets" which consist of basic food items.
* In this case, providing Ramadan Packets are regarded as benefits in kind according to Social Insurance and General Health Law, Article 80 and should not be taken into account in calculation of earnings subjected to SSI premium. But total net invoice amount of supplied foodstuff is subjected to income tax, as per Income Tax Law, Article 63.
PAYING CASH FOR MEALS
* If an employer chooses to pay in cash for the meal, this payment is considered as part of the wage and is subject to income tax as per Income Tax Law, Article 61.
* Mail cash allowance is reducible only from daily earning subjected to premium up to an amount not exceeding 6% of daily gross minimum wage valid in relevant month (4,06 TRY for 2018). Exceeding part is subject to premium contributions.
* Instead of providing meal allowance in cash or supplying foodstuff, employer may choose to provide employees with meal vouchers or checks enabling them have their lunch outside of workplace. And again these vouchers or checks regarded as benefits in kind are not subject to premium contribution.
* With regard to tax liability there is an exemption, for the virtually worked day in the year 2015, daily amount of meal voucher/check up to 13.00 TL is exempted from tax. (Not including the amounts paid for meal voucher/check not related to virtually worked day.)
* This exemption is applicable only for the meal vouchers/checks used on meals and belonged to virtually worked days. Where they are spend on products other than meals and foods, the amounts paid for them must be considered as part of the wage and must be subject to income tax.