Meals & Sustenance — New Zealand Tax Rules

Claim meal costs when travelling away from your normal place of business, and understand NZ's 50% entertainment rule.

Claimable: Conditionally claimable · Tax authority: Inland Revenue

Inland Revenue Rules

• Meals are deductible when travelling overnight for business away from your normal place of business.
• Day-trip meals may be claimable when attending a temporary work location — not your normal work base.
• Meals consumed at your regular workplace are NOT deductible — they are a personal living cost.
• Entertainment meals shared with clients, suppliers, or business associates are subject to the 50% deductibility limitation under the Entertainment Expenses rules.
• Staff functions and team meals are also 50% deductible under the entertainment limitation.
• IRD does not set fixed daily meal allowances for self-employed — claims must be for actual, reasonable costs.

Limits

Business travel meals (solo, away from base): 100% deductible at reasonable amounts. Entertainment meals with clients or staff: 50% deductible. Everyday meals at your regular work location: not deductible.

Worked Example

Maia travels from Christchurch to Wellington for a two-day conference. She claims: lunch and dinner on day one NZ$55, lunch and dinner on day two NZ$50 — total travel subsistence NZ$105 (100% deductible). She also takes two clients to dinner in Wellington — NZ$180 total — 50% deductible = NZ$90. Total meal claim: NZ$195.

Record Keeping

• Keep all meal receipts with date, location, and business purpose noted
• Record whether each meal is travel subsistence (100%) or entertainment (50%)
• For entertainment meals, note the names and business relationship of attendees
• Keep receipts showing the full cost of entertainment meals before the 50% reduction
• Record the business trip itinerary to evidence the travel subsistence context

Frequently Asked Questions

Can I claim daily lunches when working from my home office?

No. Meals at your regular place of work — including your home office — are personal living costs and not deductible. Only meals when you are working away from your normal base (travelling to a client, attending a conference, or working temporarily at a different location) are claimable.

How does the 50% entertainment rule work for client meals?

Meals with clients, prospects, suppliers, or business associates are classified as entertainment in New Zealand. Only 50% of the cost is deductible. Your own meals while travelling for business (without a client present) are 100% deductible as travel subsistence. Keep separate records for the two categories.

Can I claim staff Christmas party or team lunch costs?

Staff parties and team meals are classified as entertainment and are 50% deductible in New Zealand. Keep the invoices, note the business purpose (e.g. team building / staff recognition) and the number of attendees. The 50% limitation also applies to end-of-year functions.

Does IRD allow a standard daily meal rate for sole traders on business trips?

No. IRD does not publish a fixed daily meal allowance for self-employed individuals. You claim actual reasonable meal costs. Keep receipts. Extravagant meal costs may be questioned — claims should reflect reasonable meal costs for the location and nature of the business activity.

How do meal costs affect Provisional Tax, and how are they entered in myIR?

Deductible meal costs reduce your taxable net profit, which reduces your Residual Income Tax (RIT) and, in turn, your Provisional Tax instalments. In myIR, enter total meal costs — separating full deductible travel meals from the 50% entertainment figure — in the 'Expenses' section of your IR3. Calculate the 50% entertainment limitation before entering the final number.