In a recent Technical Interpretation, CRA noted that an employer-provided per diem meal allowance will not be taxable where the following conditions are met:
- It must be a reasonable amount;
- The allowance is received to cover expenses while travelling away from the metropolitan area or the municipality where the employer’s establishment is located, at which the employee normally worked or to which the employee normally reported;
- The travelling is done to perform the duties of an office or employment.
As a general rule, CRA allows an employer to use $17 (including the GST/HST, and PST) per meal as a reasonable over-time meal allowance.
CRA per diem meal allowance rates
The rate is stated in the CRA Guide T4130. CRA usually considers an allowance to be reasonable if it covers the out-of-pocket expenses incurred by an employee who is travelling for employment purposes.
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