As companies push forward with return-to-office efforts, office perks like free snacks and coffee may be on the chopping block as a result of changes around corporate tax deductions.
Signed into law by President Trump on July 4, 2025, the One Big Beautiful Bill Act eliminates the longstanding 50% tax deduction for in-office meals and snacks, beginning Jan. 1, 2026. Unless food is tied directly to client entertainment or employee travel, it will become fully nondeductible under the updated tax code.
Once a post-pandemic return-to-office peace offering, free snacks, coffee and office gimmicks are now caught between tax policy, inflation and shifting employee expectations. For CFOs, what used to be a low-stakes perk may turn into a line item with cultural and financial consequences. If coffee in particular is to stick around in offices, finance teams will have to regularly purchase a commodity that is rising in price at a rate of 30% year-over-year.
The cost of rising coffee prices
Originally introduced to Western workplaces by factory owners as a cost-efficient way to promote productivity, coffee has evolved into both a personal routine and a workplace staple over hundreds of years. As companies reduce or eliminate in-office options, employees will likely continue to consume coffee by paying for it out of pocket.
Workers will feel the added spend, as coffee costs are rising for consumers. A recent analysis by coffee and espresso test and review site Coffeeness shows that, state by state, the average employee has to work longer to afford an average cup of black coffee from a coffee shop or diner with no add-ons. Hawaii has one of the most expensive cups of coffee in the United States at $4.98 per cup, with residents working nearly eight minutes on average in order to earn enough to buy one.
At the other end of the spectrum, the Midwest has some of the cheapest coffee prices, with Nebraska residents spending just $2.12 on a cup of coffee, or just under four minutes of work, making the Cornhusker state the most affordable state for coffee drinkers.
In high-density office states like New York, California, Texas, Florida and Massachusetts, the cost of coffee relative to wages remains notable. In California, workers spend nearly six minutes of labor to afford a regular cup at $3.88, while in Massachusetts, despite having one of the highest average hourly wages at $42.65, it still takes almost five minutes to afford their $4.75 cup.
In New York, the average cup costs more than 8% of hourly earnings at $5.22. Even in states like Florida and Texas, where coffee prices are slightly lower, workers still dedicate five to six minutes of income for a basic cup, a meaningful cost if employees start purchasing daily because their jobs no longer provide it.
The Coffeeness survey also measured Starbucks-specific affordability, revealing even greater cost per cup for employees buying their daily coffee from the largest coffee brand in America. In Arkansas, Mississippi and New Mexico, a single Starbucks coffee now takes more than 10 minutes of work to afford. In contrast, workers in Washington, D.C., where hourly wages are highest at $55.02, spend less than six.
While it’s worth noting that Starbucks offers a variety of options at different price points that aren’t specified in the report, the data suggests branded options may not be financially accessible for all workers, especially in lower-wage states where out-of-pocket costs hit harder.
The finance team’s takeaway
For finance teams, the elimination of the 50% deduction on office snacks and coffee creates a new element of decision-making around human capital budgets. Whether companies continue providing snacks and coffee, cut them entirely or shift some of the cost to employees, the tax implications now demand a closer look.
Even if companies want to keep snacks and coffee around, modest programs add up. A daily coffee stipend of $2 per employee for a team of 100 equates to roughly $50,000 annually. That expense, once partially deductible, will now hit the books in full, and right as coffee prices rise, so much so that employees will feel the pinch in their budgets.
Some companies may opt to subsidize rising food and beverage costs through broader lifestyle benefits. However it’s addressed, coffee is no longer just a cultural gesture. It is a line item with implications for tax, retention and the return-to-office experience.
