Can You Write Off Meals, Coffee Meetings, and Gift Cards? CRA’s 50% Rule Explained

If you’ve ever said, “Well, it was for work, so it’s a write-off,” you’re not alone.

Meals are among the most commonly misunderstood (and overclaimed) business expenses I see. Coffee while answering emails. Lunch between meetings. A gift card to thank a referral partner. It all feels business-related… but the Canada Revenue Agency doesn’t always see it that way.

And this is where people get tripped up.

In most cases, the CRA only allows 50% of meals and entertainment expenses as a deduction - even if the expense genuinely helped you earn income. When business owners claim 100% (or make blanket claims without thinking), it can create real problems during a review or audit.

Let’s slow this down and make it clear - without shame, without jargon, and without pretending the rules make more sense than they actually do.

The CRA 50% Rule: What It Actually Says

Under CRA rules, most meals and entertainment expenses are deductible only at 50%.

This applies whether:

• You paid for a client

• You ate alone while working

• You grabbed coffee during a business meeting

• You ordered food while travelling for work

The rule lives under Line 8523 – Meals and Entertainment in CRA’s self-employed expense categories, published by the Canada Revenue Agency.

Why does the CRA cap it at 50%?

Because they consider meals to have a personal benefit, even when there’s a business purpose involved.

You still had to eat. You would have eaten anyway. So the CRA splits the difference.

You don’t have to agree with this logic - but you do have to follow it. And yes, this is precisely why meals are such a common audit trigger.

When Meals Are 100% Deductible

This is the part most entrepreneurs don’t know - and it matters. There are situations where meals are deductible at 100%, but they’re specific and limited. Here are the most common exceptions:

1. Meals Provided at Employee Events

If you provide food or entertainment for all employees at a staff event (such as a holiday party), the cost is 100% deductible for up to six (6) events per year.

Think:

• Holiday parties

• Staff appreciation events

• Company-wide celebrations

This does not include taking one employee out for lunch.

2. Meals at Remote or Temporary Work Sites

If you provide meals to employees working at a remote job site or camp where food isn’t reasonably available, those meals can be 100% deductible. This often applies to:

• Construction sites

• Remote project work

• Camp-style accommodations

3. Food Included in Conference or Event Fees

If meals are included with a conference ticket or registration fee, they are typically 100% deductible because they’re considered part of the event cost, not discretionary dining.

4. Meals Billed Back to a Client

If you incur meal costs as part of a client project and bill them back as a disbursement, the full amount may be deductible.

Important caveat: You need clear documentation showing that the expense was incurred on behalf of the client, not as a perk or convenience.

What Counts as a “Business Meal”?

This is where nuance matters - and where people often overclaim. For a meal to qualify as a business expense, it must be incurred with a reasonable expectation of generating income. That’s a core CRA concept.

To protect yourself, for each expense, you should be able to document: Who you met with (or why you were working), what the business purpose was, when it happened and how much it cost

You also need to retain receipts for at least six years, in accordance with CRA recordkeeping requirements.

If you’re ever audited, the CRA isn’t just looking at numbers - they’re looking at patterns. Vague descriptions, repetitive coffee claims, or daily meals coded as business expenses are red flags. 

(If receipts and documentation feel overwhelming, this is exactly why I talk so much about systems - digital receipt tracking matters more than people think.)

Coffee Meetings: Are They Deductible?

Short answer: sometimes.

YES - coffee can be deductible if:

• There is a clear business purpose

• You’re meeting a client, collaborator, or referral partner

• The meeting relates directly to earning income

In these cases, coffee falls under meals and entertainment - meaning 50% deductible, not 100%.

NO - coffee is not deductible if:

• It’s a casual catch-up

• It’s a networking hangout with no defined business purpose

• It’s coffee with a friend who also owns a business

• It’s just you working at a café because you like the vibes

CRA has become increasingly skeptical of vague claims like “coffee meeting” without details. If you can’t clearly explain why the meeting was necessary to earn income, it may not qualify at all.

What About Meals While Working Alone?

This one surprises people. If you buy lunch while working by yourself - even if you’re deep in client work - that meal is still personal in nature.

In limited cases, it may qualify as a 50% deductible business meal, but it’s one of the easiest areas to overclaim. Claiming daily lunches or frequent solo meals is risky and often complicated to justify.

If you’re unsure whether something qualifies, this is where an expense classifier or write-off guide can save you from guessing.

Gift Cards and Client Gifts: Where People Mess This Up

Client gifts are another common problem area.

Here’s the rule:

• Non-food gifts are generally 100% deductible

• Food-based gifts fall under the 50% meals and entertainment rule

Examples:

• Branded merch, books, flowers, gift baskets → 100% deductible

• A bottle of wine → 100% deductible

• Starbucks or restaurant gift card → 50% deductible

Even though gift cards don’t look like meals, the CRA treats them as food if they’re redeemable for food or beverages.

Real-Life Examples (Because This Is Where It Clicks)

• Taking a client out for lunch → 50% deductible

• Buying your team pizza for working late → 100% deductible (for up to 6 instances per year)

• Coffee while working alone → 50% deductible (only if justified)

• Buying a client a holiday gift basket → 100% deductible

• Starbucks gift card for a referral partner → 50% deductible

Common Mistakes I See Business Owners Make

These aren’t “bad business owner” mistakes - they’re normal, understandable ones. But the following can still cause problems:

• Writing off every meal purchased while working

• Claiming meals during personal trips without a clear business purpose

• Deducting 100% of restaurant or coffee gift cards

• Keeping no receipts or vague notes

• Misclassifying meetings, events, or staff meals

Most audits don’t start because someone was trying to cheat. They start because the claims don’t line up with the rules.

Why This Matters (Beyond the Numbers)

I care less about whether you maximize every possible deduction and more about whether your books can stand up to scrutiny without causing panic.

Overclaiming meals doesn’t just risk penalties - it adds stress, shame, and confusion later. Many people realize something is wrong only after they’re already deep in CRA correspondence.

Clarity upfront is kinder to your nervous system - and to your future self.

---

If you’re tired of guessing what counts as a write-off - or worried you’ve already misclassified expenses - you don’t have to figure this out alone.

• Use the Classifying Business Expenses Guide to help classify your business expenses

• Pair meals with travel properly using the Car Expenses Workbook

• Check out my Tax Write-Off Guide for plain-language explanations

• Or reach out HERE to connect with me! 

You deserve accounting support that’s clear, judgment-free, and built for real life - not just tax theory.