Meals and entertainment deduction calculator.

The 50% rule for meals and entertainment

CRA says the most you can claim for food, beverages and entertainment is 50% of the lesser of the amount you incurred and an amount that is reasonable in the circumstances. Food and beverages consumed by a long-haul truck driver during an eligible travel period are deductible at 80%; that is a period of at least 24 continuous hours away from the driver's home municipality and metropolitan area while driving to or from a place beyond 160 km.

Worked example. $500 of client meals gives a $250 deduction. At a 25% tax rate that saves $62.50. A trucker's $500 of eligible food is deductible at $400.

When the 50% limit does not apply

CRA lists cases such as a business that regularly provides food, beverages or entertainment to customers for compensation, such as a restaurant; amounts billed to a client and shown on the bill; certain expenses at remote work sites and temporary work camps; an office party or similar event for all employees at a location (up to six a year); and fundraising events that mainly benefit a registered charity. For GST/HST input tax credits on the same expenses, see the ITC calculator. Whether an expense is reasonable, and whether it was for business, remains a matter for you to document.