Business Expense – Meal Allowance
Posted On: 24/08/17 - 0

Business Expense – Meal Allowance

CRA Guidelines On Business Expense –  Meal Allowances

The CRA’s policies on taxable benefits and allowances allow the employer to exclude the value of a meal from an employee’s income.  This non taxable benefit for the employee is a result of doing business out of town. The CRA recently ruled that an employer provided meal allowance will not be taxable.  The following guidelines have been set out by the CRA. The amount expensed must be a reasonable amount as deemed by the CRA. The meal allowance is to cover employee expenses while travelling on business away from home. The business travel is for you to perform the required duties of  your employment.

What Are Your Reasonable Amounts?

The CRA allows an employer to use $17.00, including the GST per meal as a reasonable meal allowance. The rate is stated in the CRA Guide T4130. The CRA considers an allowance to be reasonable if it covers the out-of-pocket employee expenses. This is your allowable business expense by an employee who is travelling for employment purposes.

New 2020 Meal Expense Allowances

The CRA has revised the meal allowance because of continued rising costs to conduct business. As of  September 3, 2020,  the government has raised the per meal allowance from $17.00 to $23.00.

New 2022 Detailed Method

If you choose this new method to expense meals, you must keep your receipts and claim the actual number you spent.

New 2022 Simplified Method

The simplified method allows you to claim a flat rate of $23.00 per meal to a maximum of $69.00 per day. This is per person without receipts. In other words, you do not have to keep detailed receipts if you choose the simplified method. However, in the event of an audit you may be asked to provide supporting documents.

 

 

 

 

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