Updated Checked by the Tax-Services.ca editorial team How we check
Meal and entertainment expenses are deductible in Canada, but only half. The CRA lets you claim 50% of the lesser of what you actually spent and a reasonable amount, so a $4,000 year of client lunches gives you a $2,000 deduction. A few situations get 100%, and long-haul truck drivers get 80%.
What does the 50% rule cover?
More than restaurant bills. The limit also applies to meals on business trips, meals at a conference, and entertainment such as tickets to a game or a show, cover charges, tips and hospitality suite rentals. If the cost is food, drink or fun, expect to claim half of it. Even a double-double and a muffin with a client follows the same rule as a steak dinner: half of the Timmies receipt, not all of it.
The “lesser of” wording matters. If you took a client to a $400 dinner and the CRA thinks $250 is reasonable for that meal, half of $250 is your ceiling, not half of $400. Nobody publishes a dollar cap, so use judgement and keep the receipt.
When can you claim more than half?
The CRA’s line 8523 page lists the exceptions. This table is our summary of it, so read the page itself before you rely on an edge case.
| Situation | Share you can deduct |
|---|---|
| Most business meals and entertainment | 50% |
| Your business sells food, drink or entertainment for a fee (a restaurant, say) | 100% |
| You bill the client for the meal and show it on the invoice | 100% |
| Office party or similar event for all employees at one location, up to six a year | 100% |
| Fund-raising event that benefits a registered charity | 100% |
| Meals for employees at a temporary construction work camp | 100% |
| Long-haul truck driver, at least 24 hours away and hauling beyond 160 km | 80% |
The trucker rule is the only one with a different percentage, and the CRA words it plainly:
Expenses for food and beverages consumed by a long-haul truck driver during an eligible travel period are deductible at 80%.
Line 8523, Meals and entertainment, canada.ca
Couriers and rickshaw drivers have their own flat daily amount of $23 for the extra food the job needs. Above that, you need receipts and an explanation.
How much does the missing 50% cost you?
Take Priya, an Alberta sole proprietor whose profit is $82,000 before any meals. Her client meals came to $4,000. We ran three cases through the self-employed tax calculator, which adds federal tax, Alberta tax and both halves of CPP.
| Meals claimed | Net business income | Tax and CPP |
|---|---|---|
| Nothing | $82,000 | $22,448.12 |
| Half, $2,000 | $80,000 | $21,726.92 |
| All, $4,000 (not allowed) | $78,000 | $21,005.72 |
So the half she can claim saves $721.20, and the half she can’t would have saved another $721.20. That’s the real price of the rule: about 18 cents back on each dollar of meals, at this income. It moves with your bracket, and you can check yours with the marginal tax rate calculator. One quirk to know about: in this tool, CPP follows net business income, so it shrinks a little along with the tax.
What records do you need to back up a meal claim?
The receipt, first of all. A card slip alone shows the amount and the restaurant, but not why you were there. Jot down who you met and what you discussed, and do it the same day, because you won’t remember in April.
Then keep it all long enough. The CRA says to hold on to required records and supporting documents for six years from the end of the last tax year they relate to, which the CRA’s page on keeping records spells out. A photo of the receipt in a folder, plus the note, beats a shoebox every time. Our self-employed expenses checklist covers the rest of what to save.
Which mistakes get meals claims turned down?
Most refusals come down to paper and purpose. A card slip with no note on who you met and why is thin evidence.
The other trap is personal spending. Lunch alone at your desk isn’t a client meal. A dinner with a friend who happens to run a business isn’t one either unless you can show a business reason. And claiming 100% when the exception doesn’t fit is the error auditors look for first.
Should you claim less to stay safe? No. Claim the 50% you’re entitled to on real business meals, and skip the rest. If you pay tax instalments, remember the deduction lowers your estimate too, so update the instalments calculator when your year turns out different.
Does the 50% limit apply to a corporation too?
The same 50% limit is the general rule for a corporation, but we haven’t confirmed the corporate form details here, so ask whoever prepares your T2. The corporate tax calculator shows what a change in taxable income does to the bill.
And if you’re unsure which rate a particular dinner gets, don’t guess high. Read the line 8523 page, ask a tax preparer, and claim the lower figure until you know.
Sources, and how we checked them
The 50% rule, the exceptions, the 80% rule for long-haul drivers and the $23 flat amount come from the Canada Revenue Agency‘s guide to line 8523 of form T2125, read in October 2026. The tax and CPP figures come from the calculators on this site, which use 2026 rates. No government body has reviewed or endorsed what you read here.
Frequently asked questions
Can I deduct 100% of a business lunch?
Usually not. The general limit is 50%, with exceptions such as meals you bill to a client on the invoice, or a restaurant serving customers for a fee.
Does the 50% rule apply to meals when I travel?
Yes. The CRA applies the limit to meals on business trips and at conferences as well as to local client meals.
What records should I keep for a meal claim?
Keep the receipt and write down who you met and the business reason. The CRA can ask for proof.
Do office parties count as entertainment?
They do, but a party for all employees at one location is deductible in full, up to six events a year.
Is there a different rule for truck drivers?
Yes. A long-haul truck driver on an eligible trip of at least 24 continuous hours can deduct 80% of food and drink.
- Self-employed taxes in Canada: income, CPP and GST
How tax works when you are self-employed in Canada: reporting income and expenses, paying both halves of CPP, instalments and when to register for GST