The following outlines the guidelines for claiming meals and entertainment expenses as business deductions in Canada:
General Deduction Rules
The maximum deductible amount for food, beverages, and entertainment is limited to 50% of the lesser of:
The amount you spent on these expenses, or
A reasonable amount under the circumstances.
This limitation also applies to meals consumed during travel or attendance at conventions, conferences, or similar events. However, special rules may affect claims in these cases. For more details, refer to Travel.
Exceptions to the 50% Limit
The 50% restriction does not apply if:
Your business regularly provides food, beverages, or entertainment to customers for compensation (e.g., restaurants, hotels).
You bill clients for these expenses and clearly itemize them on the invoice.
The expense is included in an employee’s taxable income (or would be included if not at a remote or special work location).
The remote work location must be at least 30 km from the nearest urban centre with a population of 40,000 or more.
Expenses for conferences, conventions, or seminars do not qualify under this exception.
Meal or entertainment costs are for an office party or similar event, inviting all employees at a specific location (limit: six events per year).
The expenses are for a fundraising event primarily benefiting a registered charity.
Meals are provided to employees at a temporary work camp set up to accommodate workers at a construction site (employees must not be expected to return home daily).
Examples of Entertainment Expenses:
Tickets to events, entrance fees, gratuities, cover charges, and room rentals for hospitality purposes.
Industry-Specific Rules
Fishers
Offshore fishers can deduct the full cost of food stocked on the boat for the crew.
Inshore fishers, who typically bring meals from home, can deduct these meal costs if they are a taxable benefit to the crew.
Meals provided to crew members are not taxable benefits if the boat was at sea for at least 36 hours or if they were provided to sharespeople (self-employed individuals sharing revenue). The 50% rule applies to sharespeople.
Long-Haul Truck Drivers
Long-haul truck drivers can deduct 80% of food and beverage expenses consumed during an eligible travel period.
An eligible travel period requires at least 24 hours away from the driver’s municipality and driving a long-haul truck to a location beyond 160 km from their residence.
Self-Employed Couriers and Drivers
Self-employed foot, bicycle couriers, and rickshaw drivers may claim a daily flat rate of $23 for extra food and beverages required due to their work.
Logbooks showing workdays and hours, along with dispatch slips, may be required for verification.
Claiming beyond the flat rate requires receipts and proof that the additional consumption exceeds the average cost and quantity for most individuals.
Daycare Business
You can claim the cost of food purchased to provide meals for the children in your care as a deductible expense.
