CRA Increases Reasonable Amount for Meal Claims, Benefits, and Allowances

In a recent News Release, “Canada Revenue Agency (CRA) increases flat rate amount for meal claims, and reasonable amount for meal benefits, and allowances,” the CRA announced that, effective immediately and retroactive to January 1, 2020, the following amounts have increased from $17 to $23:

• The amount that employers may use to determine whether an overtime meal or allowance, or the meal portion of a travel allowance, is taxable; and
• The flat rate per person that transport employees and other individuals can use to claim meal expenses under the simplified method.

Employers are not required to include the value of an overtime meal or allowance, or the meal portion of a travel allowance, in an employee’s income where the amount is considered reasonable and other conditions are met. For the purpose of claiming meal expenses, the CRA allows certain individuals, including those claiming moving expenses and transport employees, to use a simplified method of calculating meal expenses which is based on a flat rate. Under the simplified method, the individual is not required to keep receipts in support of their meal expenses.

The new rate and amount are expected to be a better representation of the average cost of a meal today.