Guide on Claiming Travel Expenses as a Business Tax Deduction in Canada
As a small business owner, figuring out whether a cost “counts” as a travel expense isn’t always straightforward. Here are some questions I hear often:
“Can I claim the gas I bought for that trip?”
“Is my hotel a tax write-off?”
“What about the meals I grabbed on the road?”
In this guide, I’ll break down:
What CRA generally considers a travel expense
When it’s deductible (and when it’s not)
How to handle mixed business & personal trips
What records CRA expects you to keep
Friendly disclaimer: This is general information, not tax or legal advice. Rules can vary depending on your situation (sole prop vs corporation, employee vs owner-manager, province, etc.). When in doubt, talk to a CPA or tax professional.
A Common Scenario
Imagine you’re a self-employed sole proprietor, using your personal vehicle for business, and working out of an office in the same city where you live.
We’ll use this as our example as we walk through the rest of this guide.
The #1 Rule: Business Purpose Comes First
Before worrying about categories and percentages, ask yourself:
“Was this trip primarily to earn business income?”
CRA’s general test is whether an expense is:
Connected to earning income, and
Reasonable in the circumstances
Examples of clearly business travel
These are usually easier to support as business-related:
Attending a conference, training, or industry event related to your work
Meeting clients, suppliers, or contractors for business
Travelling to a job site (when it’s not just your regular daily commute)
Examples that are usually not deductible (or only partly)
These are where people often over-claim:
A personal vacation with a quick coffee meeting added in
Bringing family along and trying to claim their costs
Lavish or “over the top” expenses that don’t match the size of your business
What Counts as Travel Expenses?
For tax purposes, CRA’s travel expense category usually includes:
1. Transportation
Examples: Flights, ferries, trains, taxis & ride-shares, buses, parking.
If the primary purpose of the trip is business, these costs are often fully deductible (subject to any personal portion if the trip is mixed).
Note on Personal Vehicle Use
If you use your own vehicle for business travel, CRA usually wants you to claim this through motor vehicle expenses, not under “travel.”
Why?
Because your vehicle is almost always a mixed-use asset. Most people use the same car for business and personal trips.
If CRA let you claim every tank of gas and repair bill as a “travel expense,” there’d be a high risk of over-claiming. Instead, they have you:
Work out your business-use percentage, and
Apply that percentage to your total annual vehicle costs
That way, you only deduct the portion that reasonably relates to earning income, and it’s easier for CRA to check your math if they review your return.
If you want a deeper dive into vehicle expenses, I’ve put together a separate guide specifically on claiming vehicle expenses for your business here.
Note on Commuting vs. Travelling for Business
In CRA’s eyes, commuting and business travel are not the same thing.
Home —> regular office or shop: usually personal commuting = not deductible
Main place of business —> client meeting or job site: often business travel = deductible
CRA guidance consistently treats trips from home to a regular work location as personal, even in business contexts. Trips made specifically to earn income (like going from home to a client site) are more easily supported as business travel from your main place of business.
2. Accommodations
Hotel and other accommodation costs are typically deductible when you’re travelling for business.
If the trip is partly personal (for example, tacking on a mini vacation), you’ll want to:
Claim only the business portion of the stay
Keep notes or a simple breakdown so you can explain your allocation if CRA ever asks
3. Meals While Travelling and The 50% Rule
This is where many small business owners over-claim. In most cases, CRA limits meals and entertainment to 50% of the lesser of:
what you actually paid, and
what would be considered reasonable in the situation
So even if a meal is 100% business-related, it’s usually only 50% deductible.
Are Short Out-of-Town Trips’ Meals Deductible?
CRA allows you to deduct travel expenses, including meals, when they’re incurred to earn business income. But personal or living expenses aren’t deductible, except when they qualify as travel costs while you’re away from home for business.
In practice, that means:
A short 3–4 hour trip where you grab a meal can still look like a normal personal meal
CRA could view it as a personal living expense, not an extra cost of being away for business
CRA doesn’t provide a simple “X hours away = meal deductible” rule. So a conservative, CRA-defensible approach is to claim travel meals when the facts clearly support that:
You were genuinely away from home for business, and
The meal was a reasonable cost of that trip; not just your usual lunch.
Example: Realtor Open House in Another City (3–4 Hours Away)
A realtor drives to another city for an open house, spends a couple of hours there, buys a meal, then drives home.
Conservative treatment (safest):
If the meal is just for the realtor, and the total time away is only 3–4 hours, treat the meal as personal / non-deductible.
Why?
Short trips with what looks like a normal personal meal are more likely to be treated by CRA as personal/living expenses, not necessary travel costs. If your return is reassessed, that can mean additional tax, plus penalties and interest.
In many cases, the time and stress of dealing with a review and the extra costs if CRA disagrees, aren’t worth the relatively small tax deduction you’d get by pushing the boundary.
When it becomes deductible:
Meal with a client or prospective client?
Classify as Meals & Entertainment, apply the 50% rule, and document who you met and why.
Refreshments for open house attendees?
Often supportable as a business expense. Many bookkeepers still code conservatively to Meals & Entertainment (50%) with a memo like “Open house refreshments.”
Best Practice: Document the “Why”
For any meal you claim:
Note where you travelled (city or job site)
Note the business purpose
List who was present (if it’s a client meeting)
Attach the receipt
Mixed Trips: When Travel Is Both Business and Personal
A lot of real-life travel is mixed: you attend a conference, then stay an extra day or two for personal time. CRA doesn’t expect perfection, but they do expect a reasonable approach that you can explain.
Here’s a simple workflow:
Step 1: Separate Business Days vs Personal Days
Count the days primarily spent on business activities
Count the personal days
Step 2: Allocate Costs
Easy to tie to business:
Conference registration
Taxis or transit to business events
Business-related meals (50% rule still applies)
Hotels:
Allocate based on nights used for business vs nights used for personal time
Transportation (flights, ferries, etc.):
Look at the primary purpose of the trip
If the trip is mainly for business and you simply add a couple of personal days on either side, many accountants and CRA positions support treating the main transportation cost as 100% business, as long as the personal portion is reasonable.
If you incur extra costs because of the personal portion (for example, you change your flight to stay longer, or pay a higher fare to fly on peak personal days), that extra cost is safer to treat as personal.
A more conservative option is to pro-rate transportation costs between business and personal days, similar to how you allocate hotel nights. This reduces your deduction but also reduces audit risk.
Step 3: Write down your “why”
CRA loves clarity. Keep a simple note like:
“Vancouver trip: 3-day conference + 1 client meeting (business), 2 personal days added. Hotel allocated 3/5 to business. Meals claimed for business days only (50% rule).”
Conventions and Conferences: Special Rules
CRA has specific rules around convention expenses for business:
You can usually deduct expenses for up to two conventions per year, as long as:
The convention is connected to your business/profession
It’s held in a location that’s reasonable (generally within the geographical area where you normally conduct business or where the organization normally meets)
If your convention fee includes meals or entertainment and doesn’t break them out separately:
CRA provides $50/day of the fee to be for meals/entertainment
That portion is then subject to the 50% rule (so effectively, max $25/day deductible for that part)
What Records CRA Expects You to Keep
If CRA reviews your travel expenses, the key question is:
Can you prove it was business travel?
CRA requires you to keep records supporting your income and expense claims. In general, you must keep your records for six years from the end of the last tax year they relate to.
An “audit-ready” travel file typically includes:
Receipts for transportation, hotels, and meals
Conference registration / agenda
Short notes on business purpose (who/what/why)
For vehicle trips: logbook details and odometer readings
Common CRA Red Flags (And How to Avoid Them)
No clear business purpose
Fix: Always note the “why” and tie the expense to income-earning activity.
Claiming 100% of meals
Fix: Remember the 50% limitation in most cases, even if the meal is fully business-related.
Not splitting mixed business/personal trips
Fix: Allocate reasonably based on business vs personal days and document your approach.
No logbook for vehicle claims
Fix: Use a simple logbook or a mileage app to track business kilometres. Even a basic system is better than nothing.
Want Travel Expenses Off Your Plate (and Done Properly)?
Travel deductions get messy fast. They touch:
Meals & Entertainment
Vehicle expenses and logbooks
GST/PST on receipts
Business vs personal use
If you’re tired of second-guessing every trip or worried about whether your records would hold up in a CRA review, you don’t have to figure it all out alone.
I’ll help you:
Clean up and organize what you already have
Set up simple, CRA-friendly systems going forward
Make sure you’re claiming what you’re entitled to, without creating stress at tax time
If this feels overwhelming, we can talk about me taking care of the bookkeeping for you.