Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
why fed employees, RCMP & others can receive up to $47 a day for meals but a trucker may only deduct $16.50 per day for meals
Position:
The $47 per diem refers to daily travel allowances which may be received in certain circumstances without having to be included in income. The deductibility of meal expenses is limited by s. 67 of the Act. The simplified method allows flat rate meals of $11.00 per meal ($33 a day) or 1/2 of which can be deducted from income.
Reasons:
April 24, 1998
XXXXXXXXXX
Dear XXXXXXXXXX:
I am responding to your note of October 8, 1997, addressed to the Minister of Revenue, concerning employee meal expenses. I apologize for the delay in replying.
The article which you forwarded states that federal government employees, the RCMP and other employees may claim $47.05 per day for meals without receipts. It compares this to the situation of truckers, bus drivers and salespersons who, in 1995, could deduct, from taxable employment income, up to $16.50 per day for meals if no receipts were provided. The article appears to be comparing amounts which may be deducted by eligible employees as a meal expense when no receipts are submitted to amounts which an employer may reimburse an employee for meals incurred when an employee is required to travel for employment purposes, without that reimbursement triggering tax consequences.
An employee of the federal government, along with all other classes of employees, may receive non-taxable meal allowances from their employer. This is so because the Income Tax Act excludes from an employee’s income all reasonable travel allowances when certain conditions are met. This exclusion applies to all employees, not a select group as may be implied by the article. When such an allowance is not included in an employee’s income, the employee is precluded from deducting any amount of meal or other travel expenses from employment income even if the expenses actually incurred while in travel status exceed the amount of the allowance paid by the employer.
There are some employees who must incur travel expenses and whose employers do not provide them with a travel allowance which is not included in income. The Act permits these employees to deduct travel expenses from their employment income when certain conditions are met. There are also specific classes of employees, such as railway and transport employees, who may deduct meals and lodging amounts to the extent that they have not been reimbursed by their employer. The cost of a meal may be claimed and a portion allowed as a deduction only when an expense has actually been incurred, which is ordinarily what a receipt proves. However, a simplified method of determining their meal expenses is available. The “simplified method” allows these employees to calculate their meal expenses at a flat rate of $11.00 per meal. A daily meal calculation of $33.00 translates into a deduction from income of one-half of that amount, or $16.50 per day. The 50 per cent limitation on meal expense deductions is statutorily imposed on employees, the self-employed and employers in most circumstances.
I hope that my comments are of assistance to you.
Yours sincerely, Denis Lefebvre Assistant Deputy Minister Policy and Legislation Branch Sandra Short March 9, 1998 957-2136