Pastor Reimbursement of meals-Should his portion be a taxable benefit? (Canadian)?
August 31, 2012
Updated September 6, 2012
13 comments 680 views
Our Pastor tends to take the Youth Group or other members of the congregation out for meals from time to time for various reasons and then submits his receipts for reimbursement. Should his portion of the meal be considered a taxable benefit?
I have wondered a few times about this as although he is technically working, he is receiving a free meal which makes me think this is likely a taxable benefit under Canadian Tax Law.
I was going to call CRA and still might but I wondered first if anyone has already looked into this as all too often you can call 3 times and get 3 different answers on things. :-)
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Overtime Meals and Allowances Provided to
The CRA’s current administrative policy allows for a
non-taxable status of certain overtime meals or
reasonable allowances for overtime meals. This is the
case if the employee worked three or more hours of
overtime right after his or her scheduled hours of work;
and the overtime was infrequent and occasional in nature
(less than three times a week).
Concerns have been raised to indicate the economic
benefit received by the employee are often minor, the
meaning of a “reasonable allowance” is not always clear,
employer policies often allow for meal allowances after
two hours of overtime and the strict application of the
limitation of “less than three times in a week” sometimes
leads to certain inequitable results.
In order to address these issues, effective for the 2009
year, the CRA will consider no taxable benefit to arise
• the value of the meal or meal allowance is
reasonable; a value of up to $17 will generally be
• the employee works two or more hours of overtime
right before or right after his or her scheduled hours
of work, and
• the overtime is infrequent and occasional in nature.
Less than three times a week will generally be
considered infrequent or occasional. This condition
may also be met where the meal or allowance is
provided three or more times per week on an
occasional basis to meet workload demands such as
major repairs or periodic financial reporting.
If overtime occurs on a frequent basis or becomes the
norm, the CRA considers the overtime meal allowances
to be a taxable benefit since they start taking on the
characteristics of additional remuneration. (CRA website). (CRA website(
If a pastor meets a member or members of the congregation over coffee or a meal, there is no personal portion that should be declared as a taxable benefit by the church.
You may be confusing the eligibility of the business employer to deduct the full cost of the meal with a requirement to treat a portion of the meal as personal income on the part of the employee. An employer may claom only 50% of the meal as a cost of business deduction, but that 50% is not added to the business employee's T4.
Since the restriction applies only to for-profit entities, charities and churches are not affected.
Thank you Dirk,
I have tried to find this answer online but wasn't successful. Could you tell me where on CRA's website or Charities Directorate I'd be able to find the information that states the restriction wouldn't apply for Pastor? I just want to have something in my files.
I can appriciate that you have not been able to find a CRA comment regarding your question. CRA does not comment on questions that appear to have no basis in the Income Tax Act. If you want to obtain an authoritative answer to your question, you should consult a tax lawyer. Even if CRA would respond to your question, the courts have said that CRA cannot be held to commentary provided by CRA employees.
As an intermediary step, You could consult with the legal department of the Canadian Council of Christian Charities if your church is a member. They provide answers to their members churches and organizations free of charge.
ok thanks again
This has never been an issue for anyone in private businesses where employees take clients or employees out for a meal or entertainment. if it did have taxable benefit connotations, I am sure CRA would have been all over this.
Don't wake a slepping dragon!
Do you have a portion of your budget allocated for his expenses? Depending on how you structured things, I would think that that should be considered part of his salary and should not be considered a "free meal" at all.
Jeff, I respectfully disagree with you. How you categorise expendutures in the church budget has no bearing on the tax treatment of the expense. It is purely a matter of fact whether an expense is a taxable benefit or not. This is overned exclusively by the provisions of the Income Tax Act and CRA's administrative practices. As Reg said above, this has never been a problem for employees in the for-profit sector. Only the employer is prevented from claiming a deduction of more than 50% of the meal. If that same 50% would then also be taxed in the hands of the employee, that would constitute double taxation.
The reasonable free meals for pastors is not an issue and we should not make it one.
Thanks, that does clear it up for me.
Here in the US, the IRS allows all meals related to pastoral ministry an expense. We can also claim any time we have people over for refreshments or a meal, parishioners or otherwise, as a ministry expense. We just have to keep a calendar record of who and why. Having a couple of beers and nachos while leading Theology Pub at the local brewery is deemed a pastoral ministry expense.
does the pastor have to turn in a receipt to get reimbursed by the church for meals/personal expenses? or is a printed list of expenses ok?? can he get reimbursed by church for mileage and deduct mileage on person tax? not sure how this should be handled as our council and church is new....thanks for any and all help!
With respect to receipts for meals, it is best practice of the church to require receipts to be submitted for any expense over say over $10.00 per occurrence. With respect to mileage reimbursement, there appear to be two possibilities:
1. The church could provide the pastor with a travel allowance which would be included as income on the pastor's T4 information slip. In that case the pastor would need to keep a detailed log of all expenses incurred for activities on behalf of the church to be able to claim a deduction from income at income tax filing time. This is complex and I would not advise using this method, or
2. The pastor keeps a log of all kilometers driven for the church and submits that log on a monthly basis to the church for reimbursement. In this case, the church is permitted to reimburse $0.54 per kilometer for 2017 to the pastor. The rate is adjusted annually.
The above response would apply if the church is in Canada. The US likely will have different rules.
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