What to take away
- Fares, hotel stays and meals are the core travel costs, but meals are generally limited to 50%.
- Only the business part of a mixed trip is deductible, so the purpose of the trip should be recorded at the time.
- If a corporation reimburses you, the payment is generally tax-free only when you were required to travel for the job.
What counts as business travel
On Form T2125, the CRA says you can deduct travel expenses you incur to earn business and professional income. It names three common costs: public transportation fares, hotel accommodation and meals. The test is the purpose. A trip to meet a client, deliver a service, attend a supplier meeting or take part in a business event fits. A trip that you would have taken anyway for personal reasons does not become deductible because you answered a few emails.
The usual rule for the whole form also applies. Expenses must be reasonable and incurred to earn income, and you enter only the business part. Driving your own vehicle is handled under separate vehicle rules, which our article on vehicle expenses and logbook rules explains.
Fares, hotels and other direct costs
Airfare, train and bus tickets, taxis and hotel rooms are claimed in the amount that relates to the business trip. A fare for the business leg is straightforward. A sensible hotel booking that covers the nights of the meeting is as well. The CRA’s standard of a reasonable expense also applies, so an unusually expensive choice may draw questions if the business reason is thin.
Keep the booking confirmation as well as the receipt. A confirmation shows the dates and destination, while a receipt shows what you actually paid. Together they tell the story of a trip months later, when memory has faded.
Meals while you travel
Meals on a trip are not exempt from the 50% limit. The CRA says the limit applies to meals, beverages and entertainment when you travel, and it also applies to food and drink served on an airplane, train or bus when the ticket price does not include them. The deductible amount is 50% of the lesser of what you spent and what is reasonable in the circumstances.
An illustrative three-day trip might include $240 of meals. The deduction would be $120 if the whole amount is reasonable. A long-haul truck driver has a different percentage during an eligible travel period, and some other exceptions exist. Our article on the 50% meals and entertainment rule lists them, so check it before assuming one applies.
Conventions and conferences
The CRA has separate rules for conventions. You can deduct the cost of attending up to two conventions a year, provided they relate to your business or profession and are held by a business or professional organization within the area where that organization normally operates. The second condition may not apply when an organization from another country sponsors the event and it relates to your business.
If the fee includes food, beverages or entertainment and the organizer does not show them separately, subtract $50 for each day those items are provided. The $50 daily amount is claimed as a meal, subject to the 50% limit. For example, an illustrative $900 fee covering three days of meals would leave $750 for the convention expense and $150 for meals before the limit. Incidental items like coffee at a meeting do not count.
Trips that mix business and personal time
The CRA’s travel guidance gives no formula for a mixed trip, only the rule that personal expenses are not deductible. That means the split has to be reasonable and explainable. Flying to a client meeting and then staying for a vacation week is a typical case. The fare to the destination can reasonably relate to the business, while the extra nights, personal meals and sightseeing do not.
A family member who joins you is a personal cost, not a business one, unless that person has a real business role. Write down the purpose of the trip, who you met, the dates of business activity and the dates of personal time before you leave. A short note made at the time is far stronger than a reconstruction at tax time.
GST/HST on travel costs
If you are a GST/HST registrant, the CRA lists travel among the expenses that may qualify for input tax credits, with the usual condition that the expense relates to your commercial activities and is reasonable. The credit on meals and entertainment follows the same 50% limit as the income tax deduction, while the ITC for most other travel costs follows business use.
The deduction is reduced by any input tax credit you claim, so avoid counting the same tax twice. Small businesses on the quick method generally cannot claim credits on operating expenses. Ask your accountant whether the quick method applies to you before assuming credits are available.
When an employer or corporation pays
If you work through your own corporation, travel paid or reimbursed to an employee is not handled like a sole proprietor’s deduction. The CRA’s payroll guidance says an allowance or reimbursement for travel the employee was required to make in the course of their duties may not be taxable, while one paid when the employee was not required to travel is taxable.
Business travel and a personal holiday also need to be kept apart when the corporation is paying, because personal travel paid by a corporation may be a taxable benefit to the person who took the trip. Ask your accountant how to document the required travel and the reimbursement before the corporation pays for anything.
Records to keep and mistakes to avoid
Keep itineraries, receipts, a note of the business purpose and a list of who you met. The CRA expects receipts to show the date, the seller and a description, and generally expects you to keep records for six years from the end of the last tax year they relate to.
The most common mistakes are deducting meals at 100%, charging personal days to the business and keeping no record of the business purpose. Bring a short travel summary to your accountant at year end, ask which costs belong on the travel line and ask whether any should be treated differently.
Sources & editorial notes
Sources checked October 24, 2026. The examples are illustrative and provide general information. Discuss how the guidance applies to your circumstances with your accountant.
- Business expensesCanada Revenue Agency
- Line 8523 – Meals and entertainmentCanada Revenue Agency
- Input tax creditsCanada Revenue Agency
- Calculate input tax credits – ITC eligibility percentageCanada Revenue Agency
- Business recordsCanada Revenue Agency
- Where and how long to keep recordsCanada Revenue Agency
- Completing Form T2125Canada Revenue Agency
- Line 9200 – Travel expensesCanada Revenue Agency
- Other business expensesCanada Revenue Agency
- Travel expenses (employer allowances and reimbursements)Canada Revenue Agency
Rules and guidance can change. Use the current official source and confirm the treatment for your facts. To flag an error, contact Sora.