What are Sodexo coupons? Why does a company give Sodexo coupons to its employees? What's the business model of Sudexo?

Sodexo (company) provides companies and public authorities with meal passes, restaurant vouchers, mobility passes, leisure passes, book cards, and training voucher in form of coupons and processes them upon uses. Unlike dollars or any national currency, It is circulated and managed by solely by Sodexo. Government providestax-rebate on usage of Sodexo and hence used by companies to maximize the http://benefits.By Sodexo coupons, companies intend to motivate its employee to use it formeals. Normally if it is dollar, people would try to save as much as they can (psychologically), which is not the case with Sodexo. There are few otherpoints in this business which are mention worthy: Sodexo makes money through advertisement on it coupon. Through   this, they sell advertisements. Imagine, how VISA takes a cut of 2.5% on all the transaction you does through your Credit or DEBIT card. Since, everything is managed by Sodexo, it takes a cut in each transaction. If you multiply with the volume, it is huge. It is a huge brand. Sodexo is a form of encouragement to employees. Company often pass on Sodexo coupon to employees for good performance. Sodexo is in various other business and works in various counties of the world. In 2012, its reportd revenue was 15.3 Billion Euros.

There are different kind of Sodexo coupons available. But mainly Sodexo Meal Pass coupons are given by employer to its employees monthly for tax saving purpose.The value of the coupons varies from employer to employer. It is observed that many of such employers as well as their employees are under the impression that sodexo coupons are fully exempt and are not taxable as perquisites irrespective of the amount. This is not correct interpretation of law.Rule (3)(7)(iii) dealing with such perquisites is reproduced here under for discussion.‘The value of free food and non-alcoholic beverages provided by the employer to an employee shall be the amount of expenditure incurred by such employer. The amount so determined shall be reduced by the amount, if any, paid or recovered from the employee for such benefit or amenity:Provided that nothing contained in this clause shall apply to free food and non-alcoholic beverages provided by such employer during working hours at office or business premises or through paid vouchers which are not transferable and usable only at eating joints, to the extent the value thereof in either case does not exceed fifty rupees per meal or to tea or snacks provided during working hours or to free food and non-alcoholic beverages during working hours provided in a remote area or an off-shore installation.’As mentioned in the rule, the valuation of this perquisite is done taking the gross cost to the employer as reduced by an amount collected from the employee in this regards, i.e. at the net cost to employer. This perquisite is tax free only to the extent of Rs. 50 (max) per meal during the working hours. It is very important to understand that one has to consider the working hours of the organization to calculate the tax-free amount of this perquisite.Hence : 2 meals a day = 2*50 = 100 / day *30 days = 3,000 INR / monthSodexo coupons are totally tax free to employees.This provides a huge tax benefit to employees - let's say an employee is in 30% tax bracket (CTC is higher than 10 lacs). Then every month one could save 900 INR / month in Income Tax (for taking 3000  Sodexo). This can be thought as 12*900 = 10,800 INR tax saving / year.In return Sodexo charges 2% commission to employers when they book Sodexo coupons for their employees. When you go and purchase your grocery from lets say Big Bazaar from these Sodexo coupons. Sodexo charges 2% to Big Bazaar as well when they want to encash these Sodexo coopons. So sodexo earns a lot of profit through this conversion of Sodexo coupons to INR and vice versa.Hope this helps!