Introducing Sodexo Passes: Are They Really Beneficial for Your Company and Employees?

Dear All,

My company is planning to introduce Sodexo passes to the salary structure of employees. I have done some research and have also met a representative from Sodexo. After all the discussions, I found that the introduction of Sodexo is mainly centered on employee benefits. I am still in a fix to make a decision as I am not clear about the company's benefits in introducing Sodexo.

Kindly share your experiences regarding the same.

Dear Prachi,

Yes, Sodexo passes are a tax benefit for employees. To my knowledge, we can issue up to Rs. 50 per day, or in other words, Rs. 1300 per month (26 working days per month x 50 Rs.). I think earlier it was Rs. 30,000 per annum, with a maximum of Rs. 100 per day.

To obtain these coupons, the employer has to pay service and delivery charges, as well as service tax on these charges. Please note that the employer should not deduct these charges from the employee's salary. If you wait a bit longer, I am sure our seniors will provide you with an appropriate answer regarding this matter.

Thank you.

Dear TELIKEPALLI,

Thank you for sharing your view. You are right, it's Rs. 50 per day for lunch. However, the representative from Sodexo has informed me that it's Rs. 100 for the meal and Rs. 40 for coffee & snacks per day. So it becomes Rs. 140 per day, totaling Rs. 3640 per month.

But my doubt is, what are the company's benefits in introducing such a concept in the salary structure? Because at the end of the day, the company ends up paying more for meal passes (tax, service charge, delivery charges). There must be some reason for introducing them apart from employee welfare.

I can wait for some time since the decision is still on hold, and before introducing, we have to consider all pros and cons.

Dear Prachi,

In Europe, Sodexo passes are the norm and not an option for employees in most companies. The only companies that do not have Sodexo vouchers are the really small companies that cut corners on everything. Having lived abroad for a very long time (I came back over a month ago), I have noticed that they are an excellent way to retain employees. Also, the amount on the passes goes up each year based on inflation and the profits made by the company. However, this is not mandatory. There are tax benefits and costs too. Normally it is 50/50 or 60/40 (company/employee). The passes are given to everyone from top to bottom management and are of the same amount.

Companies that wish to provide this incentive to their employees and do not wish to be taxed too heavily by the government, as well as pay as little as possible, take the minimum amount possible (on which the government does not charge any tax) and increase it by the bare minimum every year. This ensures that employees are happy, are provided an incentive while making sure that the company pays the least minimum cost possible. In this scenario, there is no cost to the employee, and it does not figure on their payslip either.

Lastly and equally important, some very good companies also provide the Sodexo passes to all employees at all levels with no cost to the employee at all. In this case though, it figures on the payslip and is also incorporated into the salary structure.

Hope this is useful information for you.

Regards,

Rachna

Dear Prachi,

Giving the benefit of a Food Coupon facility to employees can be optional since this is not going to benefit all levels of employees in an organization. The amount for tax purposes is Rs. 50/- per day for 26 days, which is correct. This benefit is common across most companies. Regarding the commission payable to the Food Coupon agency, some companies deduct it from employees' salaries while others do not. This is purely based on the company's policy on whether to charge the employees' accounts or consider it a company expense. By adopting food coupons, employers do not receive any direct benefit, but this practice is primarily to avoid taxes.

Regards,
S. Anand

Dear all,

I am receiving Sodexo vouchers/coupons. It is the worst for all employees of our organization. Here are the reasons:

(1) You cannot find any shops that are willing to accept coupons or accept them based on the MRP on the package. In our country, the MRP written on the box is much higher. So, if you purchase packed items with coupons, Sodexo ends up costing you more than your tax liability.

(2) Any company that starts with Sodexo may not provide other alternatives to employees who are not willing to take S'Coupons. So, such employees will cash it with traders who deduct a lump sum amount that is much higher than the tax liability.

(3) Sodexo does not cover all cities in India.

(4) Simply put, economic principles state that direct purchases are always cheaper than indirect purchases, and Sodexo coupons are also under the 12% service charge category.

Please be a good HR manager and avoid Sodexo for the morale of employees or take each employee's opinion into consideration before issuing Sodexo. It is not part of the Indian system.

Hi dear,

Regarding your question about Sodexo passes in the salary structure, it is a good thing for both the employer and the employee. From the employer's perspective, it provides tax benefits and helps retain existing employees in the organization, building trust in the company. Instead of focusing on whether it is costly for the company, consider the advantages it brings. Employees feel like they are a part of the organization and believe that the company cares for them, leading to increased satisfaction and productivity. In today's work environment where people frequently change jobs within six months, efforts like this can improve your company's retention ratio and reduce the need for excessive spending on new hires.

I hope this clarifies things for you. Focus not just on the present but also on the future.

Dear Prachi,

In my company, we have issued Sodexo Coupons. It is basically a tax-saving scheme for the employees, considered one of the welfare measures for the employees and their families. Nowadays, Sodexo Coupons and Sodexo Gift Coupons are accepted in various places. They will be useful for employees earning higher salaries as they can save income tax as per prevailing tax laws.

You can negotiate with Sodexo Company for service charges, etc. One suggestion is that you do not show these Sodexo coupons in salary slips; they have to be disbursed separately as a welfare measure. I am sure you will earn lots of goodwill from employees' families.

Ravindra
Paradise HR Solutions
Nashik.

Dear Anand,

Thanks for sharing your views. You are absolutely right that some companies charge their employees for the meal passes, while some do not. As far as my knowledge goes, there are options like:
1) optional for the employees
2) employees paying the full amount
3) company pays 50%, and the employee pays 50%
4) some even follow 40/60% splits too.

Now, my concern is on what grounds I should opt for the above-mentioned options.
Which policy is your company currently following??

---

I corrected the spelling and grammar errors, adjusted sentence structures for clarity, and ensured proper paragraph formatting.

Dear Ravindra,

Thanks for sharing your views. I am surprised to know that Sodexo people can negotiate on the service charge. Well, I guess that will totally depend upon the bulk purchase. Can you let me know how flexible Sodexo people are regarding the service charge? You can drop me a mail at [Login to view] with details.

Regards,
Prachi

Dear Prachi,

I am working with an MNC, and our company provides Sodexo passes to employees as part of their salary to facilitate tax benefits. Sodexo passes are mandatory in our organization as an HR policy. However, in my experience, the majority of employees view it as an imposed policy. Their reasoning is that upon receiving the Sodexo passes, they are obligated to spend that specific amount on food products, even though their monthly expenses are lower. Additionally, in certain areas, shops do not accept Sodexo passes. I believe it should be optional for employees to avail themselves of this facility.

Sanjay Chhabra

Thanks, Sanjay, for sharing your views on the topic. I do agree that this should be an optional part for the employees as I can't impose on my employees to spend a particular amount of their salary on something which they might not be willing to spend.