Certain employee meal allowances can now cost $23 without being taxable (up from $17)
The CRA announced it is increasing the amount that an employer can use to determine whether an overtime meal or allowance—or the meal portion of a travel allowance—is taxable, to $23 (from $17). Likewise, the CRA has also increased the rate at which transport employees and certain other individuals can claim meal expenses using the simplified method to $23 per meal (from $17).
While the announcement was made September 3, 2020, the increases are retroactive to January 1, 2020.
The CRA generally allows an employer to exclude the value of an overtime meal or allowance, or certain travel allowances (including a meal portion), from an employee's income if the value is reasonable and other conditions are met. Prior to the CRA's recent announcement, the CRA generally considered a "reasonable" allowance or meal cost to be a value of up to $17 (including GST/HST and PST). If all of the conditions are met and the meal or allowance is not a taxable benefit, the employer does not need to report the value of the meal or allowance on the employee's T4 slip.
The CRA allows transport employees and individuals claiming moving expenses, medical expenses, or the northern resident's deduction, to calculate their meal expenses claim on their personal income tax return using the simplified method. This method is based on a flat rate and individuals do not have to keep receipts for their meals.
For more information, contact your KPMG advisor.
Information is current to September 15, 2020. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500
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