Yes, you can deduct some meal and entertainment expenses for your small business in Canada, but the CRA has strict rules about what qualifies. In 2026, the general rule is that you can deduct 50% of eligible meal and entertainment expenses, provided they are reasonable in cost, directly related to business, and well-documented. However, certain exceptions allow 100% deduction (like meals provided to employees at a business event), so understanding the CRA rules may help you maximize legitimate write-offs while staying compliant. Not all food and fun costs qualify. The CRA distinguishes between business entertainment (shared with clients or partners) and employee meals. Here's what may be eligible: Meals with business purpose: - Lunch or dinner with a client or potential client while discussing business - Coffee meetings with business contacts - Meals during business conferences or seminars - Client appreciation dinners or networking events Entertainment with business purpose: - Sports event or concert tickets (when entertained with a business contact) - Golf or recreation outings with clients - Theatre or show tickets for business entertaining - Club memberships (if primarily for business purposes) Employee meals (100% deductible): - Meals provided to employees during work hours at the workplace -
In most cases, no. The CRA allows 50% deduction for meal and entertainment expenses with clients or business contacts. However, meals provided to employees at the workplace or during work events may be 100% deductible, depending on the circumstances.
The CRA expects documentation for all business deductions. Without a receipt, you may not be able to claim the expense if audited. Keep all receipts, invoices, and credit card statements as proof of business meals.
Club memberships can be deductible if they are used primarily for business purposes, such as entertaining clients. However, personal recreational memberships or country clubs used mainly for personal enjoyment are not deductible.
Yes, alcohol as part of a business meal or client entertainment can be deductible (50% rule applies), but only if it is a reasonable component of business entertaining. Alcohol purchased for personal consumption is never deductible.
You should keep all receipts and supporting documentation for at least six years from the date of the expense. This allows the CRA time to audit your claim if needed.