Starting in April 2026, the tax-free ceiling on "meal subsidies" (shokuji hojo) that companies provide to employees will rise from 3,500 yen to 7,500 yen per month (both tax-excluded) — the first increase in 42 years. For companies this is fully deductible as an expense; for employees it is a rare "effective pay raise" that carries no income tax, no resident tax, and no social insurance premiums. This article explains, based on official National Tax Agency (NTA) sources, why this is more efficient than raising salaries, the two requirements for tax-free treatment, and the common pitfalls.
What changed? From 3,500 yen to 7,500 yen (from April 2026)
The tax-free limit on meal subsidies had been frozen at 3,500 yen per month since 1984 — for 42 years. In response to rising prices, the NTA revised its income-tax basic circular (Article 36-38-2) effective March 31, 2026, and the new ceiling applies to meals provided on or after April 1, 2026.
| Item | Before revision (until March 2026) | After revision (from April 2026) |
|---|---|---|
| Tax-free ceiling on company-borne cost (monthly) | 3,500 yen (tax-excluded) | 7,500 yen (tax-excluded) |
| Maximum meal value eligible for tax-free treatment (monthly, when split) | 7,000 yen | 15,000 yen |
| Late-night meal allowance paid in cash (special case, per meal) | 300 yen | 650 yen |
With the company-borne amount tax-free up to 7,500 yen per month, a company can return up to 90,000 yen per employee per year with no tax or social insurance premiums attached at all.
Why this beats "just raising salary"
Giving an employee an extra 7,500 yen a month makes a big difference in take-home pay depending on whether it comes as salary or as a meal subsidy.
| Raise salary by 7,500 yen/month | Provide a 7,500 yen/month meal subsidy | |
|---|---|---|
| Employee income tax / resident tax | Applies | Does not apply |
| Employee / company social insurance premiums | Apply (increase for both) | Do not apply |
| Company expense (deductible) | Yes | Yes (welfare expense) |
| Employee's effective take-home | After tax and social insurance are deducted (roughly 70-80%) | Nearly the full amount |
Raising salary means the employee loses part of it to tax and social insurance, and the company's social insurance burden also increases. With a meal subsidy, neither side incurs that extra burden, and almost the entire amount stays with the employee. Amid labor shortages, it is drawing attention as a benefit that helps with hiring and retention. Other ways to boost take-home pay for employees are covered in our guide to taxes for employees.
The two requirements for tax-free treatment — miss either one and it's all taxed
To make a meal subsidy tax-free, a company must satisfy both of the following (NTA Tax Answer No. 2594):
- The employee bears at least half (50% or more) of the cost of the meal
- The amount the company bears (meal value minus the employee's share) is 7,500 yen or less per month (tax-excluded)
For example, if a meal worth 15,000 yen a month is provided, with the employee paying 7,500 yen and the company paying 7,500 yen, both requirements are met and the company's share is tax-free. If either condition is not met, the entire company-borne amount is taxed as salary, so care is needed.
Can company officers or a one-person company president use this?
Officers can potentially be covered by the meal-subsidy tax exemption too, but a scheme designed to favor only specific people will be denied. Rather than offering generous meal subsidies only to the president or to officers, the program must, in principle, apply to all employees under the same rules. For a president with no employees, this program alone has limited effect, but it may be worth considering as part of a broader corporate welfare design combined with things like a business-trip travel expense regulation (see Corporate Finance Hacks 2026).
Do this today
- (Business owners / HR) Check whether your current meal subsidy meets the requirements — employee pays 50%+ of the cost, company's share is 7,500 yen or less per month, and it is provided in kind
- If it is currently paid in cash, consider switching to an in-kind method such as meal vouchers, catering, or a meal-subsidy service
- (Employees) Check whether your company offers a meal subsidy, or plans to expand it to match the higher ceiling starting April 2026
For more actions, see the Take-Home Pay Boost Checklist.
Frequently Asked Questions
Q. If I receive 7,500 yen in cash every month for meals, is it tax-free?
A. No. A meal subsidy is tax-free only when provided in kind, such as through a company cafeteria, catered bento boxes, meal vouchers, or a meal-subsidy service. If paid directly in cash, the entire amount is taxed as salary regardless of the amount (except for the special case of up to 650 yen per meal in cash for late-night workers).
Q. Is it tax-free if the company pays the full 7,500 yen per month?
A. Even if the company's share is 7,500 yen or less per month, it is not tax-free unless the requirement that "the employee bears 50% or more of the meal cost" is also met. For example, if the meal costs 7,500 yen a month and the company pays all of it, the employee's share is 0%, so the requirement is not met and the entire amount is taxed. The employee must also bear at least half.
Q. From when does the 7,500 yen ceiling apply?
A. The new ceiling (7,500 yen per month, tax-excluded) applies to meals provided on or after April 1, 2026. The NTA revised its income-tax basic circular effective March 31, 2026. The special cash allowance for late-night workers' meals was also raised at the same time, from 300 yen to 650 yen per meal.
Q. Does this also apply to part-time and temporary employees?
A. Regardless of employment type, a meal subsidy can be provided tax-free as long as the requirements are met — the employee bears 50% or more, the company's share is 7,500 yen or less per month, and it is provided in kind. It must be run under fair rules that apply to all employees.
- NTA No. 2594: When meals are provided to employees (Japanese) (basis: Income Tax Basic Circular 36-38-2, revised March 31, 2026)
This article is general information, not tax advice. Whether a specific arrangement qualifies depends on individual circumstances, so please confirm with a tax accountant (zeirishi) or your local tax office. All amounts are tax-excluded. The rules may change with future circulars. The Japanese version and official sources are authoritative.