payroll dept. meal tax?

Question by mnavarro831@sbcglobal.net: payroll dept. meal tax?
im starting payroll for a restaurant and the owner pays them a so called meal tax, is that a deduction for the owner and is it considered wages for the employee?

Best answer:

Answer by PepsiLime
The only meals tax that I know of is what the restaurant charges it’s customers and then pays that to the state. Never heard of a meals tax being paid to the employees. Does the owner mean “tips” instead?

Thank you for the e-mail clarification. Here’s the info from the U.S. Master Tax Guide.

Meals that are excludable from an employee’s income under Code Sec. 119 are considered a de minimis fringe benefit under Code Sec. 121. If more than one-half of the employees are furnished meals for the convenience of the employer, all meals provided on the premises are treated as furnished for the convience of the employer (Code Sec. 119(b)(4)). Therefore, the meals are fully deductible by the employer, instead of possibly being subject to the 50% limit on business meal deductions, and excludable by the employees.

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payroll dept. meal tax?

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