In 2026, the maximum value of the food allowance exempt from IRS and Social Security contributions will increase, benefiting mainly those who receive this support through a meal card. The update results from a Government proposal presented to Public Service unions and will also have impacts on the private sector.
According to a website specializing in personal finance, the proposal foresees that the meal allowance for Public Administration workers will increase to 6.15 euros per working day in 2026. This value, although applied directly only to the public sector, works as a legal reference for the tax exemption limits applicable to private companies.
The increase in the Public Service subsidy thus automatically updates the maximum ceilings that can be paid without IRS taxation or Social Security discounts in the private sector. In practice, workers will be able to receive up to 10.46 euros per day when the subsidy is paid by electronic card, or up to 6.15 euros when paid in cash.
How the food subsidy exemption works
The food allowance is one of the most common benefits in the Portuguese labor market, but it is only exempt from taxes if it meets specific rules. First of all, the amount paid cannot exceed the legal limits defined for each payment method and can only be attributed for each day actually worked, excluding vacation days, absences or holidays.
Furthermore, the allowance must maintain a compensatory nature, intended to cover meal expenses during the working period. Whenever these conditions are not respected, the amount no longer benefits from tax exemption.
The law clearly distinguishes between payment in cash and by meal card. In the first case, the maximum exempt limit is set at 6.15 euros per day. When paying via electronic card, the ceiling rises to 10.46 euros, reflecting the tax incentive associated with more restricted use, limited to catering establishments and food stores.
How the meal card limit is calculated
The maximum amount exempt when paying by card results from a legal formula that is based on the minimum guaranteed monthly remuneration. The calculation corresponds to 70% of the minimum wage, divided by 22 working days and multiplied by 1.70. With the expected increase in the national minimum wage in 2026, this formula leads to a new daily limit of 10.46 euros.
Whenever the company grants a subsidy above these values, the difference becomes treated as income from dependent work. This means that the excess amount is subject to IRS and Social Security contributions, both on the worker’s and the employer’s side.
A simple example helps you understand the impact. If a company pays 12 euros per day on a meal card, only 10.46 euros are exempt. The remaining 1.54 euros are added to the salary for the purposes of taxation and social discounts.
Impact for workers and companies
The update of the exemption limits translates into an increase in workers’ disposable income, without tax increases, and a reduction in contributory charges associated with the food subsidy. For companies, the new framework may imply a review of internal policies and values practiced, especially in cases where there are collective bargaining agreements.
Despite this, increasing legal limits does not automatically oblige employers to update the amount paid. It is up to each company to decide whether or not to follow the new bar, within the framework of its salary practices and internal negotiations.
According to the same source specialized in personal finances, workers should confirm the amounts allocated on the salary slip, check whether the subsidy is being correctly treated from a tax point of view and, whenever possible, choose to pay by meal card to benefit from the higher exemption limit.
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