Self-employed Canadians can claim 50% of eligible meal and entertainment expenses as a business deduction, but only if they're directly related to earning business income. This means a client lunch or team dinner that happens while conducting business may qualify, but the expense must be reasonable and well-documented. The CRA applies a strict 50% limitation rule to these costs, which means even if you spend $200 on a meal with a client, you can only deduct $100. The 50% limit is a hard cap that applies to most meal and entertainment expenses. This rule exists partly as a policy measure and partly to prevent overuse of personal expenses disguised as business costs. The deduction applies to: - Client or prospect meals - Employee meals during business travel - Meals at business conferences or seminars - Staff appreciation events - Business entertainment (theatre, golf outings, client dinners) One exception exists: if you're in the food or beverage business and sell these items as part of your inventory, the full cost may be deductible rather than 50%. However, this is specific to business operations like catering or restaurants. Not all meals and entertainment expenses are deductible, even partially.
No. The CRA limits meal and entertainment expense deductions to 50% of the actual cost. If you spend $100 on a client dinner, you can only claim $50 as a business deduction.
Meals where you're actively conducting or developing business with clients, prospects, employees, or business partners qualify. The meal must have a clear business purpose and be documented with receipts and attendee details.
Yes. The CRA requires itemized receipts showing what was purchased, the date, amount, and vendor. Credit card statements alone aren't sufficient. You should also keep notes about attendees and the business purpose.
Golf clubs, athletic clubs, and similar memberships are not deductible as entertainment, even if you use them for business purposes. The CRA treats these as personal expenses.
Yes. Meals eaten while traveling on legitimate business are subject to the same 50% deduction limit. Meals eaten alone, even during a business trip, may not qualify at all.