How Florida Contractors Can Benefit from the Supper Money Tax Deduction
As a Florida construction or trades business owner, we know that one or more of your team members may have to stay late on a job site or take care of a customer emergency. Providing meals for these dedicated employees isn't just a nice gesture—it's also an excellent opportunity to enjoy a valuable tax benefit.
What Is the Supper Money Fringe Benefit?
The IRS allows a special tax deduction known casually as the "supper money fringe benefit." This benefit lets you, the business owner, cover the cost of meals for yourself and your employees who occasionally work late or stay longer at job sites. It's an appealing perk, helping to keep your team happy while offering significant tax advantages.
How Does the Supper Money Benefit Work?
Under current IRS rules, when you buy supper for yourself and your employees who work overtime, the meal money provided is tax-free to everyone receiving it, and you, as the business owner, can deduct 50% of this expense from your taxes.
For example, suppose you and one of your team members stay late at a job site in Tampa to handle an urgent HVAC repair. You provide a discretionary meal allowance of $56 for dinner to yourself and another $56 for your employee, totaling $112. As the employer, you can deduct half of this cost ($56), and you and your employee receive these meals tax-free.
Important Rules to Follow
To qualify for this beneficial deduction, you need to follow these four IRS rules:
Occasional Provision: Meals should be provided only occasionally, not regularly.
Reasonable Amount: The meal allowance must be reasonable; excessive amounts are prohibited.
Overtime Enablement: The meal must directly support employees working overtime.
Not Based on Hours: The allowance should not be tied directly to the number of overtime hours worked. A flat discretionary allowance (such as $56 per meal) is acceptable.
If these rules aren't followed, the meal allowance becomes taxable compensation for the employee, subject to payroll taxes, although it is fully deductible for the employer.
Changes Coming in 2026
The supper money benefit deduction is set at 50%, but be aware that changes are on the horizon. Starting in 2026, this deduction will be eliminated under the Tax Cuts and Jobs Act. Meals provided to employees will remain tax-free for them, but you will no longer be able to deduct these expenses.
Why This Matters for Florida Contractors
Given Florida's booming construction industry, overtime work is not irregular. Leveraging this deduction provides some tax relief and boosts employee morale by showing appreciation for their dedication. Using this strategy wisely today allows you to maximize your tax benefits before the rules change in 2026.
Take Advantage Now
Offering meals during overtime is a great way to support your hardworking Florida crew. If you need assistance or advice on correctly implementing this strategy to ensure compliance with IRS rules, our team at is here to help. Reach out anytime to learn more about maximizing your tax benefits while caring for your employees.
Don't already have an accountant or tax preparer? Feel free to schedule a call to see if we'd be a good fit for you.
