Dear Members,
I'm an HR professional working for a medium-sized manufacturing sector. I am in the early stages of my career and also the first HR personnel in this firm. As a developing company, today our number of employees has increased from 10 to 50 in-office, with a few others working on a pan-India basis.
There has been a growing demand from employees to arrange for food (lunch and breakfast) facilities at our firm. When I approached my management, they requested me to conduct a feasibility study for this need along with cost management.
I have a few questions here:
1) How should this budget be treated - is it considered a food expense of the firm or part of employee social welfare?
2) Should I consider charging 30% to 50% of the cost from employees through their CTC?
3) What should be done if an employee chooses not to opt for the food service, and how should I compensate them for the food expenses incurred for those who do opt for it?
4) What other procedures should I take care of concerning food and safety measures?
Thanks & regards,
Keerthana Chandrasekar
From Germany, Georgsmarienhuette
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1I'm an HR professional working for a medium-sized manufacturing sector. I am in the early stages of my career and also the first HR personnel in this firm. As a developing company, today our number of employees has increased from 10 to 50 in-office, with a few others working on a pan-India basis.
There has been a growing demand from employees to arrange for food (lunch and breakfast) facilities at our firm. When I approached my management, they requested me to conduct a feasibility study for this need along with cost management.
I have a few questions here:
1) How should this budget be treated - is it considered a food expense of the firm or part of employee social welfare?
2) Should I consider charging 30% to 50% of the cost from employees through their CTC?
3) What should be done if an employee chooses not to opt for the food service, and how should I compensate them for the food expenses incurred for those who do opt for it?
4) What other procedures should I take care of concerning food and safety measures?
Thanks & regards,
Keerthana Chandrasekar
From Germany, Georgsmarienhuette
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These are internal decisions of the company, so there is no standard you can rely on.
1) How should this budget be treated... is it food expenses of the firm or employee social welfare?
This is a standard business expense, and you should put it as food expense, canteen expense, or staff welfare expense. All are allowed under the Income Tax Act. You can also claim GST ITC as it is an exemption under Sec 17(5) as a statutorily required supply of meals.
2) Should I charge 30% to 50% of the cost from Employees through CTC. Completely your choice. You can also not charge anything if you wish.
3) What if an employee doesn't choose for food and how should I compensate him or her with the food expense incurred for those who opt for?
If someone does not opt for the food, he will make his arrangement. You need not compensate him separately. However, if you are following the CTC method, then those not opting for it automatically get a different benefit as you will keep CTC the same.
4) What sort of other procedures should I take care of when it comes to food and safety measures? You need to choose a vendor who has the proper facility, good quality control, and hygiene levels. Do not go by the lowest rate alone. Have a canteen committee consisting of worker and management representatives to monitor food quality and ensure compliance with hygiene regulations.
Incidentally, you will need an FSSAI license.
From India, Mumbai
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1) How should this budget be treated... is it food expenses of the firm or employee social welfare?
This is a standard business expense, and you should put it as food expense, canteen expense, or staff welfare expense. All are allowed under the Income Tax Act. You can also claim GST ITC as it is an exemption under Sec 17(5) as a statutorily required supply of meals.
2) Should I charge 30% to 50% of the cost from Employees through CTC. Completely your choice. You can also not charge anything if you wish.
3) What if an employee doesn't choose for food and how should I compensate him or her with the food expense incurred for those who opt for?
If someone does not opt for the food, he will make his arrangement. You need not compensate him separately. However, if you are following the CTC method, then those not opting for it automatically get a different benefit as you will keep CTC the same.
4) What sort of other procedures should I take care of when it comes to food and safety measures? You need to choose a vendor who has the proper facility, good quality control, and hygiene levels. Do not go by the lowest rate alone. Have a canteen committee consisting of worker and management representatives to monitor food quality and ensure compliance with hygiene regulations.
Incidentally, you will need an FSSAI license.
From India, Mumbai
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Food .doc
Food-for-the-th inker-.ppt