What amount can I charge to my company in terms of per diem travel expenses?

The CRA looks at what is deemed reasonable in terms of travel expenses. If the travel allowance is reasonable, then you don’t have to include it in your personal income. If it is not reasonable, then it is an income inclusion and you will need to pay tax on it. In terms of what is meant by reasonable, you have to compare what costs you actually incur on one of your business travels and assign a reasonable allowance afterwards. As for the meals portion, the CRA considers a value of up to $17 of the travel allowance to be reasonable.

For example, if you charge $100 per trip to your company for your travel allowance but in fact you’re spending closer to $10 or $20, it will be difficult for you to prove to the CRA that you have been spending $100 if you don’t have receipts for the specific travel expenses. However, if you’re spending $80 to $90, then the $100 is more reasonable in terms of allowance, making it easier to provide proof to the CRA should they want to reassess you (given that you keep proof of the receipts during your business travels).

ABOUT THE AUTHOR

ALLAN MADAN

CA.CPA.CGA

Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.

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