Meals can be deductible—but only if you follow the CRA’s rules. Whether you're buying coffee for a client or hosting a team event, the fine print matters. Here’s what you need to know before claiming meals, drinks, or entertainment on your taxes.

The 50% Rule

Most meal and entertainment expenses are only 50% deductible, either on the actual amount spent or whatever the CRA deems "reasonable"—whichever is lower.
📌 Tip: If you're entertaining a $50 client with a $500 dinner, you might have trouble justifying that expense.

When You Can Claim 100%

You can claim the full cost (100%) of meals and entertainment if:

• Your business sells food or entertainment as part of its service
• The expense is for an employee party (up to 6 per year)
• You're billing the client directly for the meal
• The expense is for a registered charity’s fundraiser

Business Meals and Gifts

• Gift baskets, restaurant gift cards, and coffee cards = considered meals → 50% deductible
• Snacks and drinks in the office need a valid business reason and a note on who consumed what and why
• Team events (up to 6 per year) can be 100% deductible

📝 Pro tip: Never eat alone if you want to write it off. Always write who you were with and why you met on the receipt.

Convention & Conference Meals

You can deduct up to two conventions per year if:

• They're relevant to your business
• They're held within the organizer’s usual area

If meals are included but not itemized, subtract $50/day and apply the 50% rule to that amount.
☕ Coffee and doughnuts provided at meetings are considered incidental and don’t count.

Employee Travel Meals

Employees can deduct food and beverage costs when:

• They're regularly required to travel
• They pay their own expenses under an employment contract
• They aren’t reimbursed
• They have a signed T2200 form on file
• They’re away 12+ hours from their usual workplace/city

If eating solo, keep a log of where you went, how long you were gone, and why you couldn’t return within 12 hours. When in doubt, turn it into a business lunch with someone else.

One Final Cautionary Tale

A client was audited and asked to provide the name and phone number for every meal deduction. They couldn’t. The CRA disallowed them all.

😬 It’s all good—until it’s not.