How much of meals and entertainment can I deduct?
The general rule is 50% of reasonable business meals and entertainment — with a handful of true 100% exceptions, and a paper-trail standard CRA actually enforces.
Business meals are deductible, but the default is half: the general rule caps meals and entertainment at 50% of the reasonable cost, on the logic that you had to eat anyway.
The real 100% exceptions
A few situations escape the cap — most usefully, staff events for all employees (think the holiday party), allowed at 100% for up to six events a year, and meals billed straight through to a client on their invoice. Long-haul trucker meals also get better treatment under their own rules.
What CRA looks for
Who, where, and why — not just the receipt. A card statement line is not support; a note of the client and purpose on the expense is. Meals are a benchmark category CRA compares across your industry, so volume without documentation reads as personal spending.
The quiet mistakes
Claiming solo lunches as business meals, entertaining that is really personal socializing, and forgetting the 50% add-back on the HST input tax credit side, which mirrors the same limit.
This is general information, not tax advice for your situation. Book a call and a Canadian accountant will give you the answer for your business.
Common questions
Can I deduct coffee meetings and client lunches?
Yes, at 50%, when there's a genuine business purpose — and note who you met and why. Frequency and reasonableness matter; the fifth client lunch this week gets more scrutiny than the first.
Is my team's holiday party really 100% deductible?
Events open to all staff qualify for the 100% treatment, up to six such events per year. Partner dinners and client entertainment stay at 50%.