Meals and travel are some of the most popular business deductions.
They’re also some of the most abused.

The CRA knows this — which is why they look closely at these categories.
This post breaks down exactly what’s allowed, what isn’t, and how to track it properly so you can claim the maximum without raising red flags.

MEALS — 50% Deductible (With Proof)

Meals are deductible if:

✔ There is a clear business purpose
✔ You met with someone directly related to earning income
✔ You record who and why

Examples of allowed meals:

• Meeting a client to discuss an ongoing contract
• Coffee with a supplier to negotiate better pricing
• Taking contractors out to plan a job
• Meals while traveling for business

Examples of not allowed meals:

• Lunch because you were hungry
• Coffee alone at Starbucks before a job
• Meeting a friend and “talking a little business”
• Meals during a commute

Important: Write notes on the receipt or in your bookkeeping system:
“Lunch w/ Richard — quote review for weekly service.”

TRAVEL — Deductible If Business Is the Primary Purpose

Travel expenses are valid when the trip is mainly for business.

Eligible travel expenses include:

• Flights
• Hotels
• Rental vehicles
• Baggage fees
• Travel fuel
• Taxis, Uber, transit
• Meals (50%)

Proof of business purpose is essential:

• client meetings
• trade shows
• supplier visits
• industry events
• training tied to revenue

Travel that is partly personal must be prorated.

Example:
A 5-day trip to Vancouver

• 3 days = business meetings
• 2 days = visiting friends
  Only 3/5 of travel expenses are deductible.

ENTERTAINMENT — Only Certain Activities Qualify

These are only deductible if they directly support revenue:

• Tickets to a game with a client (50% deductible)
• Golfing with a prospect to negotiate a deal
• Event passes for networking or sales

Not deductible:

• Birthday parties
• Family events
• Social outings where business is incidental

CRA calls this the “primary purpose” rule — entertainment must clearly be about business.

Travel That Gets Audited Fast

🚩 “Research trip” to Mexico
🚩 Family vacation with one business call
🚩 Trips with no receipts or itinerary
🚩 Travel claimed by businesses with no revenue

If CRA sees weak documentation, the entire deduction is denied.

How Castle Bookkeeping Makes These Deductions Audit-Proof

We ensure every travel and meal expense has:

• Business purpose documented
• Names of people involved
• Receipts stored digitally
• Prorated where necessary
• Category tracked properly in QBO

That way, if CRA ever asks — we have everything ready.

What About Gift Cards?

If you take a client out for lunch: 50% deductible
If you give a client a gift card instead: 100% deductible

It counts as a promotional gift rather than a meal.

(Hint: Many Castle clients use this strategy.)

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