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Is this client gift 100% or 50%?
100% for an ordinary business gift; 50% when the gift is food, beverages or entertainment — a restaurant gift card or event tickets.
One question decides it: whether what you bought is food, drink or entertainment. A hamper is whole; a restaurant gift card is half. Enter the receipt and both figures appear, with the reason.
Enter the gift and say what kind it is. The answer is 100% or 50%, and why.
How it is worked out
Two rules, then the credit that follows them.
Applied by the same engine that runs inside the app. This page is not a separate copy of them.
An ordinary business gift — no restriction
A gift to a client is a business expense like any other: its cost net of recoverable GST/HST is deductible in full. The Income Tax Act sets no dollar cap on it. The $500 figure people remember is the CRA’s policy for non-cash gifts to employees, which is a different rule about a different person.
Unless it is food, drink or entertainment — ITA s.67.1
Section 67.1 limits any amount paid for food, beverages or entertainment to 50%, and it does not stop applying because the amount was a gift. A restaurant gift card, a case of wine, tickets to a game: half, and half of the credit with it. CRA: food, beverages and entertainment expenses.
The credit matches, on the GST/HST alone
100% or 50%, the same figure as the deduction, and only ever on the GST/HST. PST and RST are a cost and never a credit, so a British Columbia receipt with both taxes on it needs the two lines kept apart. CRA: claim input tax credits.
What this does not account for
- Gifts to employees. A different rule entirely — non-cash gifts up to $500 a year may be non-taxable, cash and near-cash are not, and long-service awards have their own treatment. Neither this page nor LedgerLodge computes them.
- Whether the gift is reasonable. The expense still has to be incurred to earn income, and an extravagant gift invites the question. The calculator takes your word for it.
- Mixed gifts. A hamper holding both a bottle of wine and a non-edible item is two amounts under s.67.1, not one. Split it into two entries; this page applies one answer to the whole receipt.
- Shareholder benefits. A “gift” to yourself or a related person is not a client gift, and s.15(1) is the rule that applies. This page assumes a genuine third-party client.
- Whether you are registered for GST/HST. The credit assumes the corporation is a registrant. If it is not, there is no input tax credit.
- Quebec. QST follows its own regime with its own restrictions. Treat the credit here as GST/HST only.
Rules as they stand for the 2026 tax year, checked against the CRA sources linked above, each on or since 14 September 2026. Section 67.1 has been amended before and could be again.
Questions
About client gifts and the CRA.
Are client gifts tax deductible in Canada?
Yes, in full, as long as the gift is a reasonable business expense and is not food, beverages or entertainment. A $224.00 hamper with $10.00 of recoverable GST produces a $214.00 net deduction and a $10.00 ITC. There is no dollar cap on a business gift to a client in the Income Tax Act — the cap people are thinking of is the CRA's $500 policy for gifts to employees, which is a different rule about a different person.
Why would a client gift only be 50% deductible?
Because section 67.1 does not care that it was a gift. It limits any amount paid for food, beverages or entertainment to 50%, whoever consumes it. A $105.00 restaurant gift card produces a $2.50 ITC and a $51.25 deduction after that credit, exactly as if you had eaten the meal yourself. The same goes for a case of wine or a pair of tickets.
Is a gift card to a restaurant treated as a meal?
Yes. What the money buys is what matters, not the form the gift takes. A gift card redeemable for food and drink is an amount paid for food and drink, so it is halved. A gift card to a general retailer, where the recipient chooses what to buy, is an ordinary business gift and is not.
What about tickets to a game, a concert or a golf day?
Entertainment, so 50%. Tickets to a sporting event, a theatre or a concert are named in the CRA's own guidance on section 67.1, and so are club dues and the cost of a private box. Giving the tickets away rather than using them yourself does not change the answer.
How much GST or HST can I claim back on a client gift?
The same percentage as the deduction: all of it on an ordinary gift, half of it on food, drink or entertainment. PST and RST are not input tax credits. Quebec QST is administered separately and may produce an ITR for a registered business; it is never included in the GST/HST credit.
Does it matter who the gift went to?
For the rule on this page, no; for the record, very much. The deduction depends on what the gift was, but the expense has to be a business expense in the first place, and what makes it one is the client it went to and the reason. That is what a reviewer asks about a year later, and a receipt on its own does not say it.
Is a gift to an employee the same thing?
No, and this page does not answer that question. Gifts and awards to employees run under a separate CRA policy — a non-cash gift may be a non-taxable benefit up to $500 a year, near-cash and cash are taxable, and there are rules for long-service awards. LedgerLodge does not compute employee gift benefits, so this calculator is for gifts to clients only.
The percentage is easy. Remembering why is not.
In April, a $224.00 line on a card statement does not say whether it was a hamper or a case of wine, or who it went to. LedgerLodge asks once, at the moment of entry, keeps the recipient and the reason with the receipt, and stores the rule it applied beside the figure.