What Are the Receipt Rules for Business Meals? (50% vs 100%)
Business meals are generally 50% deductible, and the substantiation has two layers: the itemized receipt (what was ordered, where, when, how much) plus the business context (who attended and the business purpose). Some meals — company parties, meals provided to the public, meals sold to clients — are 100% deductible. The receipt alone, however pristine, is never sufficient by itself.
This is general information, not tax advice.
The five facts every meal deduction needs
- Amount (from the itemized receipt, tip included).
- Date.
- Place (name and location).
- Business purpose ("discussed Q3 renewal").
- Business relationship of attendees ("J. Chen, CFO, Acme — client").
The receipt supplies facts 1–3. Facts 4–5 are yours to record — the habit that survives audits is writing attendees and purpose on the receipt (or its photo caption) before leaving the table. Expense apps have fields for exactly this; the workflow fits the capture routine from how to organize receipts for expense reports.
Why the itemized receipt specifically
The card slip shows a total; the itemized check shows what the total bought. The distinction — unpacked in what is an itemized receipt — matters here because meal deductions draw scrutiny: auditors look for alcohol-only tabs claimed as meals, personal dining mixed in, and totals inconsistent with the attendee count. Under the $75 rule, meals under $75 technically need no receipt — but the five facts still must be recorded, and most employer policies require meal receipts at any amount anyway.
What's 50% and what's 100%?
50% (the default): client and prospect meals, meals while traveling for business, working lunches with colleagues, meals at conferences beyond the registration fee.
100% (the exceptions): recreational events primarily for non-highly-compensated employees (the holiday party), food provided free to the public (open-house refreshments), meals sold to customers at full value, and meals treated as employee compensation on W-2s.
0% (the trap): entertainment. Since the 2017 tax law, entertainment itself — game tickets, golf, club dues — is nondeductible. Food purchased separately at an entertainment event can remain 50% deductible if invoiced or received separately: one more reason the itemized, separated receipt matters.
Employer policies layer on top
Reimbursement policies typically demand: the itemized receipt and the card slip, attendee names for any group meal, per-person caps, and alcohol flagged or excluded. A meal reimbursed under a compliant accountable plan is the company's deduction problem, not yours — but the documentation you submit is what makes the plan accountable, per what receipts you need for an expense report.
The bottom line
Treat every business meal as three artifacts: itemized receipt, attendees, purpose — captured at the table in under a minute. The 50% math happens at filing; the substantiation happens at lunch. Lost the check? Restaurants reprint them for days — the recovery steps are in how to replace a lost receipt.
Frequently asked questions
- Are business meals 50% or 100% deductible?
- The default is 50% — client meals, travel meals, working lunches. Company-wide recreational events, food provided to the public and meals treated as compensation reach 100%. Pure entertainment is 0%.
- Is a credit card slip enough for a meal deduction?
- No. You need the itemized check showing what was ordered, plus a record of attendees and business purpose. The slip proves payment, not the meal's business character.
- Do I need receipts for meals under $75?
- Under IRS rules, no — but you must still record amount, date, place, attendees and purpose contemporaneously, and most employer policies require meal receipts regardless of amount.
- Can I deduct alcohol on a business meal receipt?
- Alcohol served as part of a bona fide business meal generally follows the meal's 50% treatment, but company policies often exclude or cap it. Itemization is what lets anyone — employer or auditor — apply the right treatment.