Thursday, June 15

The internet saves you lunch money

I always feel sorry visiting people who work in companies big enough and far enough away from the real world that staff are served lunch in a big canteen, or from mobile vans in the carpark. For me the best part of the day is walking down the road, getting some exercise, escaping my loony workmates for a while, and trying a different place to eat as often as possible.

That's perhaps why I'm less excited than I might be at the news that can save corporate employees up to 48% of the money they pay to buy lunch each day. It's not for me - I'd probably rather get the exercise and spend the 48% extra. But it's probably a great thing for people trapped in corporate campuses at lunchtime.

It's certainly a creative mix of internet, tax planning and online catering delivery. Companies sign up to Ezybite and offer their employees the option to get an Ezybite smartcard. They order lunch online, and the food is delivered by Accor Services (huge catering giant). Delivery guy swipes your card with his reader, and.... ZAP! The money is deducted not from your own bank account, but from your pre-tax salary. That's right, from the money the company was going to pay you in salary but hadn't yet. They call it "salary sacrifice". Add up what you spend on lunch each year, and take 48% of that, and it's quite a bit of money you could save.

What I don't fully understand is the whole fringe benefit implication. I figure it works something like a car lease or mobile phone would - the company ends up paying fringe benefits tax on your sandwich and soup instead of you paying income tax on the money. When that happens, your employer reduces your salary a bit to account for the fringe benefits tax it has to pay to supply you with the benefit. Which is less than what you'd pay in income tax. I think that's how it works.

Sooo, if I have that right (and that's a big "if") it means Ezybite is really only relevant for white collar, high value employees worth salary packaging for. And in this brave new world of Australian workplace "deform", 2 cents an hour and the "race to the bottom" in wages, these sorts of benefits can easily be eroded when it comes time to negotiate the next AWA. Do you want a smaller company car in return for saving half your lunch money, Bob? Or would you rather bring in a packed lunch. Right, I thought so...

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