Portugal meal subsidy tax exemptions vary by payment method

In Portugal, the method used to pay meal subsidies significantly impacts a worker's net income due to varying tax exemption limits. When paid in cash alongside a salary, the exemption limit is set at 6 euros per day. Any amount exceeding this is subject to personal income tax (IRS) and Social Security contributions.

In contrast, when paid via a meal card, the exemption limit increases to 10.46 euros per day. This higher threshold allows employees to receive a higher net value, as the card-based exemption is 70% higher than the cash-based limit. Consequently, many companies opt for meal cards to increase worker benefits while simultaneously reducing Social Security costs.