The rules · sources read on or since 14 September 2026
How many staff events a year are 100% deductible?
CRA accepts six employer-paid social events a year, each open to all employees at a given location, as 100% deductible and free of a taxable benefit; the seventh and later events in the same year fall to the ordinary 50% limit on food, beverages and entertainment.
The rule
CRA's administrative position on social events is that up to six employer-paid events a year, open to all employees at a location, are not a taxable benefit to the people attending and are not caught by the 50% limit on food, beverages and entertainment. The GST/HST credit follows the deduction, so it is claimed in full on those events.
The seventh event in the same year, and every one after it, is treated as ordinary entertainment: 50% deductible, with 50% of the tax recoverable.
“Open to all employees” is the condition that fails
The count is the part people remember and the eligibility is the part that catches them. An event for the management team, or for one department, or for whoever happened to be in the office, is not open to all employees at that location — so it is an ordinary entertainment expense at 50% whatever number it is in the year.
For a corporation with one employee the condition is met trivially and the count is what matters. For one with five it is worth recording who was invited rather than who came, because the test is the invitation.
What to record
The date, the location, who attended, and that the event was open to all employees there. The running count for the year is the figure that decides the treatment of the next event, which is why it is a number the books should hold rather than one somebody remembers.
Where this comes from
- CRA — Social events and hospitality functions — read 14 September 2026.
Questions
Six staff events a year.
How many staff parties a year are fully deductible in Canada?
Six, where each is open to all employees at a location. The seventh and later events in the same year are 50% deductible, like any other entertainment.
Is a staff party a taxable benefit to employees?
Not within the six-event allowance for events open to all employees at a location. Outside it, the ordinary benefit rules apply to what each person received.
Does a management-only dinner count as a staff event?
No. The condition is that the event be open to all employees at that location, so a dinner for part of the staff is ordinary entertainment at 50%, whatever number it is in the year.
Can the full GST/HST be claimed on a staff event?
Yes, on an event inside the six-event allowance, because the credit follows the deduction. On the seventh and later events the credit is limited to 50% of the tax.
Put a number on it.
LedgerLodge applies this rule to every record as it is entered, stores the calculation snapshot that produced the figure, and carries both into the year-end package your accountant works from. It prepares the figures a return is built from; it does not file anything.