Can I Claim Meals and Entertainment as a Business Expense in Canada?
50% deductible for meals and entertainment incurred for business purposes. Receipts and business purpose must be documented. Exceptions allow 100% deduction for certain employee events (up to 6 per year), meals at remote work sites with shift restrictions, and meals included in a conference fee.
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What Canada Revenue Agency (CRA) says
Section 67.1 of the Income Tax Act limits the deduction for meals and entertainment to 50% of the lesser of the amount incurred and a reasonable amount in the circumstances. The 50% limit also applies to meals when you travel or attend a convention. The limit does not apply if your business regularly provides food, beverages or entertainment to customers for payment, or if you bill the client for the cost and show it on the bill. Long-haul truck drivers on eligible travel can deduct 80%. A fully deductible office party or similar event for all employees at one location is allowed up to six events per year. Fundraising events for a registered charity are also exempt.
When you can claim
- 50%: meals with clients, customers, or prospects for business purposes
- 50%: meals while travelling for business away from the business's regular location
- 100%: employer-provided meals for employees at a remote work location under shift restrictions
- 100%: staff party or event (up to 6 events per year, open to all employees)
- 100%: meals included in a conference fee (not itemised separately)
When you cannot claim
- Personal meals and entertainment with no business purpose
- Meals that are lavish or extravagant relative to the circumstances
- Entertainment at golf clubs or sporting events where no business is conducted
- Meals at restaurants primarily for personal enjoyment even if discussed for business
Good to know
Pro tip: Write the business purpose, names of attendees, and business relationship on the back of every receipt at the time of the meal. CRA requires this documentation, and reconstructing it months later is difficult. Use accounting software to photograph receipts immediately. Record any meal you bill to a client on the invoice, since that changes the deduction.
Important: The 50% limit applies to the lesser of what you spent and a reasonable amount, so a lavish meal can be cut below 50% of the bill. Keep the meal separate from other travel costs in your books to apply the limit cleanly.
Related expenses
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