Does the company pay tax on employee meal expenses?
According to the relevant provisions of the Regulations for the Implementation of the Individual Income Tax Law of the People's Republic of China, the income from wages and salaries refers to the wages, salaries, bonuses, year-end raises, labor bonuses, allowances, subsidies, and other income related to the employment of the individual in his or her position or employment. The forms of personal income include cash, in-kind, marketable securities and other forms of economic benefits. Unless otherwise specified, general welfare payments appear to be subject to personal income tax.
In addition, the State Administration of Taxation (SAT) made it clear in its official website for the interpretation of tax policies for the third quarter of 2018 that:
For benefits given to individuals by the unit of employment in office, regardless of whether they are in cash or in-kind, individual income tax shall be paid in accordance with the law. However, for benefits enjoyed collectively, indivisible and not quantified to individuals in a non-cash manner, in principle, no individual income tax shall be levied.
To summarize, the cost of employee meals belongs to the collective enjoyment of non-cash welfare, in principle, do not have to pay personal tax.
Employee meal expenses
Borrow: administrative expenses - welfare expenses
Loan: payable employee compensation - welfare expenses
Borrow: payable employee compensation
Credit: Cash on hand (bank deposits)
If it is a gathering of workers in the production department, make the following entry:
Borrow: Manufacturing expenses - welfare expenses
Credit: Cash on hand
If it is a gathering of people from functional departments, make the following entry:
Borrow: Administrative Expenses -- Welfare Expenses
Credit: Cash on Hand
If it is a gathering of people from the sales department, make the following entry:
Borrow: Selling Expenses
Credit: cash on hand
How do you account for employee meal subsidies?
For domestic enterprises to provide free employee meals, can be charged to the "payable welfare expenses" account, for foreign-invested enterprises, should be directly in the "administrative expenses - welfare expenses For foreign-invested enterprises, it should be charged directly to the "Administrative Expenses - Welfare Expenses" account. If it is to take the invoice posting, then into the welfare accounting, a one-time hit into the wages; into the welfare and wages issued together, and do not have to provide employees with the corresponding food and beverage invoices, it is included in the income from wages into the personal tax.
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