A popular workplace benefit, free snacks in the office, might soon become a thing of the past due to President Donald Trump’s recently enacted tax law, which removes long-standing deductions for meals provided by employers.
Starting January 1st, U.S. companies will no longer be able to deduct expenses related to snacks, coffee, or lunches served on-site to employees.
This change, which flew under the radar during the legislative process, is part of Trump’s major tax overhaul signed into law on July 4th.
The Act keeps the planned expiration of food deductions that had been set in motion back in 2017 when Trump first introduced tax changes. At that time, deductions were halved and were scheduled to be eliminated entirely by the end of this year.
The elimination of this deduction could affect perks that have become staples of modern office life, especially those popularized during the dot-com era in Silicon Valley. Now, these perks are common across various sectors, including finance and tech.
According to the Society for Human Resource Management, around 44% of U.S. employers currently offer free snacks—doubling the number from a decade ago.
It is estimated that removing these deductions could generate about $32 billion in tax revenue from employers by 2034, as per the Taxation Commission.
However, the actual impact on businesses is still uncertain. Many have yet to decide whether to cut back on providing food for employees or absorb the extra costs.
Industries like Hi-Tech and Finance, known for their generous employee perks, are particularly noteworthy. For instance, Google is famous for its gourmet cafeteria, offering all-day meals and snack areas. Meanwhile, companies such as Meta and Apple also provide free snacks and meals, with Apple putting an emphasis on health.
In the finance sector, firms like JPMorgan Chase provide around-the-clock “snack spots” and healthy food options, while Goldman Sachs stocks pantries and offers off-hours meal allowances.
Interestingly, some sectors have not been affected by these changes. For example, Alaska’s fisheries obtained exemptions in the final bill, likely to gain support from Senator Lisa Murkowski (R-Alaska). However, Maine’s Robb’s been left out after Senator Susan Collins (R-Maine) declined to back the law. The bill eventually passed after Vice President JD Vance cast a tie-breaking vote.
Restaurants still retain the right to deduct meal costs for their staff, a benefit that won’t be available to most other employers. Many hospitals, factories, and office-based companies had offered free meals as a morale booster and to encourage longer working hours.
Businesses have long viewed free food as a way to enhance workplace culture. Google co-founder Sergey Brin is often quoted on the importance of keeping food sources no more than 200 feet from employees to foster collaboration and productivity.
Even though costs are likely to rise, some individuals in the food service industry don’t anticipate major disruptions. Ali Sabeti, the CEO of San Francisco-based catering company Zerocater Inc., noted that his business managed to navigate prior deduction cuts without losing clients.
“It’s pretty inelastic,” Sabeti told Bloomberg News, suggesting that even if tax credits are removed, spending on food remains consistent—similar to spending on other necessities like laptops.
The Trump administration’s swift deregulation, alongside provisions promoting expenses like full equipment costs, is expected to accelerate growth and investment in the economy.
