Meals and Travel: What Counts as a Legitimate Business Expense?
When it comes to claiming meals and travel on your business tax return, the Canada Revenue Agency (CRA) draws a firm line between what’s deductible and what’s personal. Understanding that line is essential, not just for staying compliant, but for maximizing your legitimate deductions.
What Is a Legitimate Business Expense?
To qualify as a deductible business expense, meals and travel must be:
Directly related to earning income: This means the expense must support your business operations, such as attending a conference, meeting with clients, or conducting market research.
Incurred primarily for business purposes: If the main reason for the trip or meal is business, and any personal activity is incidental, you’re likely in safe territory.
Properly documented: Keep itemized receipts, note who was present, and record the business purpose. A credit card statement alone won’t cut it.
Travel Expenses That Are Deductible
You can generally claim:
Airfare, train, or bus tickets for business travel
Hotel or lodging costs during business trips
Transportation to and from airports or meeting venues
Vehicle expenses (fuel, mileage, parking) for business use
Meals while traveling for business (subject to limits)
Important: If your trip includes personal days, you must allocate expenses accordingly. For example, if you attend a 3-day conference but stay 5 days total, only 60% of your hotel costs may be deductible.
Meals and Entertainment: What You Can Claim
The CRA allows you to deduct 50% of eligible meal and entertainment expenses, including:
Meals with clients or prospects where business is discussed
Meals while traveling for business
Meals at conventions or seminars (with limits)
Food provided at staff events (up to six per year)
Special cases: Long-haul truck drivers may claim up to 80% of meal costs.
What Doesn’t Count
Expenses are considered personal and not deductible when:
The primary purpose of the trip is leisure or vacation
Meals are consumed alone without a business purpose
Entertainment is purely social (e.g., concert tickets with friends)
You try to claim a full trip because you “talked business for an hour”
Even if you mix business with pleasure, only the business portion is deductible. The CRA is clear: intent matters, and they expect you to prove it.
Pro Tips for Staying Compliant
Document everything: Who, what, when, where, and why.
Split mixed-use expenses: Allocate costs between business and personal.
Avoid vague claims: “Networking” isn’t enough, be specific.
Use a separate business credit card: It simplifies tracking and audit defense.
Final Thoughts
Meals and travel can be powerful deductions, but only when used correctly. If you're unsure whether an expense qualifies, it's better to ask than assume. I help clients navigate these rules with clarity and confidence, so you can focus on growing your business, not defending your tax return.