Journal Entry for Employee Meals

Employee meals are the business expense that company provides to the staff regarding the foods, snacks, and other food during working hours.

The business hires employees to complete the work in exchange for the salary. The salary will be taxed and paid to the government. The salary tax will be held by the company and paid to the government. The salary that company record on the income statement is more than the salary that the employee receives. The different amount is the tax paid to the government.

Any amount that company paid to employees will be considered fringe benefits. It is also taxed by the government as well.  It will be taxed differently and it depends on the tax law in each country. The fringe benefit will be withheld based on the rate to pay to the government.

The employee meals can be classified as a business expense which can be different from salary as well as the fringe benefit. It is the expense that is recorded on the company income statement.  Business expenses are the expense that is necessary to operate the business activities.

It will be recorded as an expense when the company pays for the meal for all employees. The meal is not a special reward for any staff. It will not selective for some employees. Moreover, the meal is provided for staffs only not to the external parties.

Journal Entry for Employee Meals

When the company makes payment for the employees’ meals, they have to record the expense on the income statement. The journal entry is debiting Employee meal expenses and credit cash.

Account Debit Credit
Employee meal expense $$$
Cash $$$

The transaction will increase the meal expense on the income statement and it will reduce the company profit. Some companies may record it as the other expense if the amount is too small. It also decreases cash from the balance sheet.

Journal Entry for Employee Meals Example

ABC is a construction company. One customer was the company to construct a department in a rural area. Due to the situation, the company has to pay for the employee meal otherwise they will not able to complete the work on time. The company spend $ 2,000 on meal for all the employees. Please prepare the journal entry for the employee’s meal.

The company spend $ 2,000 for the meal of all employees and help to get the work done within the deadline. It will be considered as a business expense rather than a salary or fringe benefit. The journal entry is debiting employee meal expense $ 2,000 and credit cash $ 2,000.

Account Debit Credit
Employee meal expense 2,000
Cash 2,000