Wednesday, 12 September 2007

Tax free food


Well, tax free food has arrived at my work. Hang on a minute, food is already free of GST isn't it? Yes, it is but it is also taxed because you use your after-tax dollars to purchase your food, so in an in-direct manner you are being taxed for buying your food.

While I was overseas, our HR department has introduced a program where you can purchase your food with your pre-tax dollars, essentially salary sacrificing for your food. The organisation that is running with this program is EzyBite, which is part of the Accor services.

This is how it works.
  1. You sign up with EzyBite to get onto the program.
  2. You nominate how much you want to spend on your food per pay period. So for me that would be monthly.
  3. When you are hungry, you order on-line and your food will be delivered at agreed timed, usually be lunch time.
  4. Enjoy the food and the savings.
According to EzyBite, an average saving of around 31.5% could be made but it is largely dependent on which tax bracket you fall into.

However, there are a couple of rules.
  1. You must order through the EzyBite program to get this savings. So you can't just walk into the shop and order over the counter.
  2. You must eat your food on your work premises.
These two rules are quite strict and is one of the reasons that the food can be purchased with pre-tax dollars.

I am still thinking if it make sense in my case, but will probably sign up for about $10 per month. I sometimes forget to brown bag my lunch and just buy it from the take-away across the road. This program will become quite handy. $10 per month equates to a purchase power of around $13, that should buy me a nice juicy burger with the lot!

I shall let you know in a few months time if this is working out.

photo credit: Maira Kouvara

2 comments:

Louise said...

haven't heard of this but I can see it could be useful, especailly on those really busy days when overtime and skipping meals become a problem.

You have made me start thinking baout salary sacrific now, as soon as I am back at work I will have to look into it and see what options my employer offers.

tehnyit said...

One of the most obvious salary sacrifice is money into your superannuation. I think with the recent publicity recently for the changes in the laws, most people are now aware of it.