73¢/km and $121.25: Business Trip Expenses for Canadian Corporations

Last updated: October 16, 2026

Corporate travel expenses are deductible when the corporation is the primary beneficiary of the trip and the amounts claimed are reasonable. Reimbursements backed by receipts are non-taxable to employees and deductible to the corporation, while allowances must be benchmarked to CRA rates to avoid becoming a taxable benefit. Every claim needs a documented business purpose, receipts and, where a vehicle is involved, a logbook.

TL;DR:

• Reimbursements backed by receipts are the most straightforward way to claim travel expenses and are non-taxable to employees, while allowances must be benchmarked to CRA rates to avoid becoming taxable benefits.
• Only costs directly related to business activities, like transportation, lodging, training fees, and reasonable meals, are deductible, with personal side trips or extensions requiring proper apportionment.
• Using a per-kilometre reimbursement rate within CRA limits is simpler than actual expense tracking, but it requires detailed logs of trip purpose, date, and distance.
• Meal costs are only 50% deductible, with CRA setting a standard daily allowance of $121.25 from April 2026, and exceeding receipts are required if claims surpass these benchmarks.
• Maintaining detailed records, including receipts, itineraries, and logbooks, is crucial to defend deductions and ensure GST/HST input tax credits are correctly claimed on reimbursed expenses.

Table of Contents

• 1. What counts as deductible travel costs for a corporation
• 2. Allowances versus reimbursements: structuring corporate travel policy
• 3. Vehicle use, kilometre rates and automobile benefits
• 4. Meals, per diems and the 50% limit in corporate practice
• 5. Documentation, GST/HST and claiming input tax credits on reimbursed travel
• 6. A corporate finance checklist for compliant travel expenses
• 7. Handling foreign currency expenses on international business trips
• 8. What corporate finance teams get wrong about travel expenses
• 9. How T-Ledgers supports corporate travel expense compliance
• Sources
• FAQ

1. What counts as deductible travel costs for a corporation

Corporate finance teams can generally deduct commercial transportation, lodging, conference and training fees, reasonable meals, and incidental costs incurred while an employee travels away from the regular workplace on corporate business. Ordinary commuting between home and the regular workplace never qualifies, no matter how the corporation labels it. Only the incremental cost of being away from that regular workplace is deductible.

• Commercial transportation: airfare, train, bus, and taxi or rideshare fares tied to a documented business itinerary.
• Accommodation: hotel or short-term rental costs for the nights required by the business purpose.
• Conference and training fees connected to the corporation’s business activities.
• Reasonable meals and incidentals incurred while travelling, subject to the 50% limit discussed later.

Mixed trips need apportionment. When a corporation’s employee extends a business trip for personal reasons, only the costs tied to the business days are deductible, and the corporation should apportion airfare, lodging and meals based on the days or the incremental cost attributable to the business segment. The extra nights, side excursions or family travel added on top are personal and non-deductible, and reimbursing them without adjustment risks reclassification as a taxable benefit under CRA’s travel expense guidance.

2. Allowances versus reimbursements: structuring corporate travel policy

The distinction between an allowance and a reimbursement changes how the corporation reports the payment and how much audit exposure it carries. A reimbursement repays an employee for an actual, receipted expense and is generally the cleanest option. An allowance is a fixed payment made without requiring a receipt for each dollar, and an accountable advance sits in between: money is provided upfront but the employee must account for it against actual costs.

CRA guidance treats an allowance as taxable to the employee when it is unreasonable in amount, when it is not tied to travel away from the employee’s ordinary workplace, or when the corporation cannot show it, not the employee, is the primary beneficiary of the trip. Reasonability is a question of fact, and CRA often treats amounts up to $23 as a reasonable starting benchmark for the meal portion of an allowance.

1. Separate allowance categories for meals, lodging and vehicle use rather than paying one lump sum.
2. Require receipts above a modest threshold even where a flat allowance is otherwise used.
3. Benchmark every allowance rate against current CRA figures at least once a year.

Pro Tip: Aggregated, unreceipted per diems are the single most common reason CRA reclassifies a travel allowance as a taxable benefit. Splitting categories protects the non-taxable status of each one.

3. Vehicle use, kilometre rates and automobile benefits

When an employee uses a personal vehicle for corporate business, the corporation can reimburse at a per-kilometre rate without creating a taxable benefit, provided the rate stays within CRA’s prescribed limits. As of January 1, 2026, the prescribed kilometre rates are 73 cents per kilometre for the first 5,000 kilometres and 67 cents per kilometre after that in the provinces, with slightly higher rates in the territories. These figures give corporate finance teams a defensible ceiling for setting internal mileage policy, and our CPA checklist on CRA mileage rates walks through how to apply them.

• Reimbursing by the kilometre is simpler to administer than reimbursing actual costs, but it requires a logbook recording dates, destinations, purpose and distance for every business trip.
• Reimbursing actual vehicle costs (fuel, insurance, maintenance) demands a clear allocation between business and personal use, usually derived from the same logbook.
• Employer-provided vehicles create a standby charge and an operating expense benefit that must be calculated and reported on the employee’s T4 unless specific optional conditions apply, as set out in CRA’s automobile benefits guidance.

Our vehicle expense guide covers the logbook and benefit-calculation mechanics in more detail for corporations managing a mixed fleet of employee-owned and company vehicles.

4. Meals, per diems and the 50% limit in corporate practice

Meal and entertainment costs incurred while travelling on corporate business are subject to the general rule that only 50% of the amount is deductible for income tax purposes. That limit applies to the corporation’s deduction, separately from whether a meal allowance or reimbursement is taxable to the employee.

CRA’s Appendix B sets a daily meal allowance total of $121.25 for provinces, effective April 1, 2026, broken down as $29.50 for breakfast, $30.05 for lunch and $61.70 for dinner, with higher totals in the territories. Corporations can use these figures as a defensible benchmark when designing a non-taxable per-diem rate, separate from the 50% deduction limit that applies when the corporation later claims the expense on its return.

• Split meal allowances from incidental allowances rather than bundling them into one flat daily figure.
• Require receipts once a claim exceeds the Appendix B benchmark for that meal or day.
• Apply reduced rates for extended stays once an employee has been at one location past the point where CRA expects living costs to fall, and document the reasoning.

5. Documentation, GST/HST and claiming input tax credits on reimbursed travel

CRA expects a corporation to support every travel deduction with contemporaneous records: receipts, meeting agendas or minutes, itineraries, expense reports and, where a vehicle is involved, a logbook showing the business purpose of each trip. These records are what separates a defensible deduction from one CRA can challenge on audit.

On the GST/HST side, CRA’s guidance on reimbursements treats an employee reimbursement as if the corporation had incurred the expense directly. Where the conditions of section 175 are met, the corporation can claim input tax credits on the tax paid, but the calculation method chosen must be applied consistently across the category of expense, not switched from claim to claim.

• Code expenses to the correct category at the time of entry so allowances and reimbursed items do not get mixed in the general ledger.
• Use a centralised corporate card for major travel costs where practical, reducing the volume of employee-paid claims that need separate ITC treatment.
• Review the correct method for calculating HST returns at least annually to confirm the ITC method still matches CRA’s current guidance.

Pro Tip: Inconsistent ITC methods across departments are a common reason corporations under-recover GST/HST on travel; a single documented method per expense category closes that gap.

6. A corporate finance checklist for compliant travel expenses

Corporate finance teams can reduce audit risk with a short, repeatable process rather than a lengthy policy manual. Wajahat Ajmal, CPA, recommends five checks before any travel expense clears the books.

• Confirm the corporation is the primary beneficiary of the trip and that business activity occupies the bulk of the time away.
• Decide upfront whether each cost category will be handled as an allowance or a reimbursement, and keep the categories separate.
• Benchmark every allowance rate to current CRA figures, including the kilometre rates and Appendix B meal allowances.
• Set a documentation standard, including retention periods, before the first claim is filed rather than after an audit request.
• Review the travel policy at least once a year against CRA’s published updates.

These steps do more than satisfy CRA on a review: they also improve ITC recovery by keeping the paperwork consistent enough to support a single calculation method per category, a point our team covers when we work through corporate tax filing with clients.

7. Handling foreign currency expenses on international business trips

Corporate travel that crosses borders adds a currency layer to every deduction and every GST/HST calculation. The corporation should convert each foreign expense to Canadian dollars using the exchange rate in effect on the date the expense was incurred, not a single rate applied to the whole trip, and should keep the conversion method consistent across a fiscal year rather than switching between spot rates and average rates as convenient.

Receipts issued in a foreign currency should be retained alongside the converted Canadian-dollar figure used in the expense report, so an auditor can trace the calculation back to the original amount. Where a corporate card statement already shows a converted charge, that statement can serve as the primary record, but the underlying receipt should still be kept to confirm the nature of the expense.

Foreign value-added tax or sales tax paid on a trip is generally not recoverable as a Canadian input tax credit, since ITC eligibility under CRA’s reimbursement guidance applies to GST/HST paid within the Canadian system. Corporations should record foreign tax separately from GST/HST paid domestically so the two are never combined in an ITC claim. For ground transportation booked through a foreign or domestic vendor, a documented invoice showing the vendor, date, amount and currency is what supports the claim, a point echoed in Ascend In Motion’s guidance on corporate billing for car services. When a trip mixes domestic and international legs, apportioning the currency conversion by leg rather than averaging across the whole itinerary keeps the record defensible.

8. What corporate finance teams get wrong about travel expenses

The most common pitfall is not a missing receipt but an inconsistent allowance: one department pays a flat per diem, another reimburses actual costs, and neither is benchmarked to the same CRA figures. Weak recordkeeping and quietly folding a personal side trip into the business claim are close behind.

The fix is rarely complicated. A single benchmarked policy, one ITC method per expense category, brief employee training and a periodic external CPA review tend to close most of the exposure a corporation carries, often without touching the total travel budget at all.

— Wajahat Ajmal (CPA)

9. How T-Ledgers supports corporate travel expense compliance

Building a defensible travel policy from scratch takes time most finance teams do not have, and T-Ledgers offers a flat-rate way to get it done without an hourly bill running in the background.

• Corporate Tax and GST Filing applies the ITC methods and expense treatment covered above directly to the corporation’s return.
• Virtual CFO support builds and reviews travel policies, allowance benchmarks and internal controls on an ongoing basis.
• Bookkeeping Services keep expense coding and card reconciliations consistent, which is what makes ITC recovery reliable at year-end.

Every engagement runs on a flat-rate pricing model, so the corporation knows the cost of getting its travel policy right before the work starts. Visit the service packages to find the right fit or reach out through the contact page to request a policy review.

FAQ

What can a corporation claim on a business trip?

A corporation can generally claim commercial transportation, accommodation, conference fees, reasonable meals and incidental costs incurred by an employee travelling away from the regular workplace on corporate business, subject to the CRA’s reasonability test. Ordinary commuting costs are never included.

Can a corporation deduct CRA business trip expenses?

Yes, provided the corporation is the primary beneficiary of the trip and the expense is reasonable, documented and tied to travel away from the employee’s regular workplace, as set out in CRA’s travel expense guidance. Meals remain subject to the separate 50% deduction limit even when the reimbursement itself is non-taxable to the employee.

What is the $75 rule for receipts?

CRA does not publish a formal receipt exemption amount for corporate travel claims; reasonability is assessed as a question of fact rather than a fixed dollar threshold. Corporations are better served setting their own internal receipt threshold and benchmarking allowance amounts to figures such as the Appendix B meal allowances rather than relying on an informal rule.

What qualifies as a business trip for corporate tax purposes?

A trip qualifies when the employee travels away from the regular workplace primarily to conduct the corporation’s business, and the corporation, not the employee, is the primary beneficiary of the travel. Personal extensions or side trips added to a business itinerary do not qualify and should be apportioned out of the claim.

Recommended

• 2026 Canada CRA Mileage Rates: $0.73/$0.67 and CPA Checklist
• Claim Travel Expenses on Line 9200 for Canadian Small Businesses
• CRA vehicle expenses: your 2026 guide for Canadian businesses

This article is intended to inform readers in general terms. It is not intended to provide any tax or business advice. Please consult your T-Ledgers advisor if you have any questions about your unique situation. While we have tried to ensure the accuracy of the information in this article, we accept no liability for errors or omissions.