Feeding Engagement: Why Subsidized Meals Work

For many organizations, subsidized office meals aren’t so much a perk as they are part of a broader effort to strengthen retention and productivity. 

• Subsidized office meals are eaten in the workplace and are partially or fully funded by employers.
• The ROI of subsidized meals often includes higher retention and productivity, which can lead to significant financial benefits: a 50-person company that partially subsidizes a daily lunch for 25 of its employees can expect a yearly $138,430 net benefit. 
• The best program structures are often the fully funded or partial subsidy models applied to recurring catering. 
• Hybrid teams and high-growth companies — particularly those in competitive talent markets — will benefit the most. 

When implemented properly, these programs can deliver for companies and employees. Ready to learn more? Let’s get into it.

What Are Subsidized Meals?

In a subsidized meal program, the employer covers all or part of the cost of employee meals during the day. 

Fully Subsidized Meals

A business offering fully subsidized meals pays 100% of the meal cost. Employees and administrators tend to like it because they don’t need to worry about reimbursement or coordination. 

Partially Subsidized Meals

An employer offering a partial subsidy is basically covering a fixed dollar amount or percentage, with employees paying the balance. A partially subsidized meal still offers value to employees, but spreads the cost of food around — this can be particularly useful to smaller or growing companies that want to offer subsidies as a perk but can’t cover everyone all the time.

How Do Employers Subsidize Meals?

How a business actually covers meals varies. Common options include:

• Recurring corporate catering that is delivered directly to the office.
• Reimbursing individual receipts.
• Providing gift cards or a company charge card to cover lunches.

How Do Meal Subsidies Work?

How a meal subsidy works will depend on the program a company has set up, but in general:

• An employer pays a vendor (or vendors) directly.
• There are no payroll adjustments or deductions on pay stubs.

If a subsidy is structured as a reimbursement program, or a meal allowance is added to wages, then it might show up on a pay stub. But again, in general, a meal subsidized by a company doesn’t impact employees financially. All they need to do is eat. 

Why Should Employers Subsidize Meals?

We’re big fans of employers subsidizing office meal programs, and not just because we specialize in office meal delivery. It impacts several areas of business, which we’ll get into below. 

Talent Attraction and Retention

Hiring and training a new employee can get expensive, particularly when you factor in recruiting and the productivity lost while a role is empty. Subsidizing in-office meals doesn’t guarantee someone will stick around long-term, but they do bring some perks:

• They set your company apart. Meal subsidies indicate that an employer is interested in employee well-being, and can have a positive impact on retaining current employees. This has an added financial benefit to the company, as replacing a departing employee is often extremely expensive.
• They help employees save money. Food costs are growing, particularly in high cost of living areas. A company covering any portion of meal costs is going to be at least dulling the hits on employees’ wallets. 
• It makes in-office days appealing. With more companies leaning toward hybrid and flex scheduling, paid-for meals become a particularly tempting reason to show up to the office. 
• It’s great for morale. Knowing that your place of employment is picking up the check for at least some meals feels great. 
• It promotes equity and inclusion by reducing cost burdens on lower-paid employees, along with sparing commuting employees the need to go back out into traffic to track down food. 

Stronger Collaboration and Productivity 

If you choose to subsidize recurring catering, or otherwise provide a subsidy for employees who want to have food delivered, you can see the following benefits:

• Eating together helps people get along in general, and can specifically improve how employees work together. 
• When meals are delivered, employees don’t have to leave campus to track down and find their food. They’ll also save a lot of time that would be otherwise spent in traffic or standing in line. That can add up to a lot of time that can be re-focused on work.

Less Strain on Admin and HR

Subsidized in-office meals aren’t just great for employees. HR and office managers see a reduced administrative burden when working with delivery services like Waiter. They see:

• Less time spent chasing receipts or fiddling with numbers to properly reimburse employees.
• Predictable budgeting means less time spent in spreadsheets. 

What Kind of ROI Can I Expect From Subsidized Meals?

As the old saying goes, there’s no such thing as a free lunch. So it’s fair for leaders to ask what a subsidized meal program would actually cost,  and what kind of return it can deliver.

To understand the potential impact — financial and otherwise — of subsidized office meals, consider a mid-sized company with 50 employees. 

• The average salary is $85.000.
• 65% of employees leave the office for lunch, and spend about 50 minutes away from the office.
• The company has a 15% annual turnover rate, and it costs 50% of a role’s salary to replace them (admittedly this is on the low end). 

Now let’s deliver meals directly to this company through a service like Waiter. First off, time spent outside the office drops sharply — often to about 15 minutes. Over the course of a year, that reclaimed time can translate into pretty impressive productivity gains. If our example company provides a daily $8 lunch subsidy, and 25 employees take them up on it, they’ll save 35 minutes per workday. The total cost to the company is $49,000 per year, but they’re looking at an estimated $146,009 in productivity gains. 

The estimated net annual benefit for this company is $138,430. We acknowledge it’s an impressive number, but it’s just the start; companies we work with report improvements in morale, as well as stronger team cultures stemming from shared meals. 

Taxes and Compliance

Benjamin Franklin once said, “Nothing is certain except delicious meals delivered by Waiter…and taxes.” Okay, so he didn’t quite say it that way. But alas, he has a point: you need to look into the tax situation around subsidized meals before going any further. 

Are Subsidized Meals Deductible?

Historically, certain expenses associated with business meals have at least been partially deductible. Federal and state laws may change that, though, so before implementing a program, look into:

• Current deductibility limits — does your situation meet the de minimis guidelines?
• Whether catered office meals qualify at all.
• How recurring meal programs should be categorized. 

For most organizations, the best route will be:

• Define your structure clearly.
• Confirm the tax situation with a financial advisor.
• Document the program you end up creating.
• Keep clean and thorough records. 

Address tax considerations early in the process so you aren’t surprised by anything down the line. 

How to Launch a Subsidized Office Meal Program

So you want to bring in food for your people. Amazing! We wholeheartedly approve, and not just because we hope you’ll choose us to deliver it. But a successful subsidized office meal program requires more than just a food budget. It’s going to look different for every business, but below is a general framework you can follow:

Define Your Company Goals

First, decide what results you want to see from bringing in meals.

• Increase in-office attendance?
• Improve retention?
• Strengthen cross-team collaboration?
• Support employees during intense workloads?

Without defined goals, you risk your program becoming a cost center instead of a tool that can help. At this time, you’ll also want to determine who is eligible for this perk — is it for full-time employees only, or do part-timers get to participate, too?

Select the Right Subsidy Structure

For office-based meal programs, you can choose one of three models:

• Fully subsidized meals. The company covers the full cost of catered lunches on designated days.
• Partial subsidy model. The employer covers a fixed amount per employee, with the employee picking up the rest.
• In-office meal days. In this case, meals are fully subsidized, but only offered on specific days to encourage attendance. 

The structure you choose will depend on:

• Your budget.
• In-office headcount.
• Hybrid attendance patterns.
• Any cultural goals.

Model the Budget Before You Launch

To estimate your monthly cost, you need three numbers:

• Number of participating employees.
• Employer subsidy amount per meal.
• Number of meal days per month. 

Once you have those, plug them into this formula: 

Employees x Subsidy Amount x In-Office Days = Estimated monthly cost

For example, if you have 40 participating employees and provide a $12 subsidy, four times per month, your estimated monthly investment will be $1,920 per month. Annually, that works out to $23,040. 

You can adjust for variables like participation rate and frequency. Keep in mind, too, that food prices may fluctuate throughout the year. That’s why we suggest starting with a pilot program that lasts 30 to 60 days to test engagement and financial sustainability before committing to anything long term.

Choose the Right Meal Partner

You shouldn’t trust just anyone with this endeavor. Look for a partner that provides:

• Broad restaurant selection.
• Accommodation for various dietary requirements..
• Predictable delivery windows.
• Consolidated billing.

Measure Your Results

Too often, companies implement a process and aren’t sure if it’s successful because they haven’t followed up. Once your meal subsidy program launches, track:

• Participation rates: Are numbers fairly steady?
• Employee feedback: Do people seem to enjoy it, or are you seeing complaints?
• In-office attendance: Has it changed? If you’re a hybrid office, are you seeing more people coming in on lunch days?
• Budget variance: Are you going way over budget, or staying under?

You can make adjustments as you go, including:

• Adjusting subsidy levels.
• Changing the frequency of delivery.
• Rotating cuisine choices.
• Aligning meal days with big events like deadlines and client visits. 

Ready for Lunch? 

Recurring office meal solutions aren’t just a tasty perk to lure employees into the office. They’re also a tool for improving retention, encouraging in-office engagement, and boosting daily productivity in a way even coffee can’t quite manage. And we probably don’t need to point out how much easier life is for HR and admins when they don’t need to coordinate ad hoc orders or chase down receipts. Seriously, they have other things to do!

Whether you choose to fully cover meals or want to provide a partial subsidy, a recurring catering program through Waiter makes it easy to control costs and increase in-office participation, all while accommodating dietary preferences. And did we mention we’re partnered with some of the best restaurants in the area? Because we are.
Do you want to learn more about recurring lunches, or just talk to us about how great food is? Get in touch with us today. We’d love to help you feed your people.