Can You Write Off Lunch at Work as a Business Expense?

Many employees and business owners wonder if they can deduct the cost of lunch during work hours. While some meals qualify as a deductible business expense, not all workplace lunches meet IRS requirements. Understanding when a meal qualifies for a deduction helps avoid IRS scrutiny.

Criteria for Work-Related Meal Expenses

For a meal to be deductible, it must be directly related to business activities and meet IRS guidelines. The most common deductible meals involve business discussions with clients, customers, or colleagues. The IRS requires that these meals have a clear business purpose, meaning discussions should be substantial and directly tied to company operations, revenue, or strategy. Eating lunch alone or with coworkers without a business agenda does not qualify.

Most business meals are 50% deductible, while meals provided by an employer for business reasons—such as food for employees working late or attending mandatory meetings—may qualify for a 100% deduction. The IRS scrutinizes these claims, so businesses must ensure these meals are necessary for operations rather than just a perk.

Meals provided at company events, such as staff meetings or holiday parties, are typically 100% deductible since they are considered employee benefits. However, if meals are frequently provided without a clear business necessity, the IRS may classify them as taxable compensation, leading to payroll tax implications.

Out-of-Town Assignments

Meal expenses incurred while traveling for work outside a taxpayer’s metropolitan area are often deductible. The key factor is that the individual must be away from their tax home long enough to require rest, typically meaning an overnight stay. This distinguishes deductible travel meals from routine workday lunches, which generally do not qualify.

For business trips, the IRS allows a 50% deduction on meals, provided they are not lavish or extravagant. While the definition of “extravagant” is subjective, expenses should be reasonable for the location and nature of the trip. A mid-range restaurant meal is likely acceptable, while an excessively priced dinner at a luxury venue could raise red flags.

Instead of tracking individual receipts, many businesses and self-employed individuals use the federal per diem rates set by the General Services Administration (GSA). These rates, which vary by city, establish a daily meal allowance without requiring detailed documentation for each expense. However, those using the per diem method cannot deduct actual meal costs separately, as this would result in double-dipping.

Recordkeeping Essentials

Proper documentation is necessary to support meal deductions and avoid IRS audits. Taxpayers must keep records showing the amount, time, place, and business purpose of each meal expense. Itemized receipts, which include the restaurant name, date, and total amount paid, are the best form of documentation. Credit card statements alone are insufficient since they lack details on individual items or attendees.

A well-organized recordkeeping system helps prevent disallowed deductions and penalties. Digital expense tracking apps like Expensify or QuickBooks allow users to scan and categorize receipts, reducing the risk of lost documentation. Employers reimbursing employees for business meals should follow an accountable plan under IRS regulations, requiring employees to submit records and return excess reimbursements. Failure to comply could result in meal reimbursements being treated as taxable wages.

For self-employed individuals and businesses, maintaining contemporaneous records—created at or near the time of the expense—is the best practice. The IRS may disallow deductions if records appear to be reconstructed later. Businesses should retain records for at least three years, as this is the general statute of limitations for IRS audits. If income is underreported by more than 25%, the IRS can audit up to six years, making long-term record retention advisable.

Non-Deductible Situations

Many taxpayers mistakenly assume that any meal during the workday qualifies as a deductible expense. However, the IRS excludes several common scenarios. Personal meals taken during regular business hours, even if purchased for convenience while working late or between meetings, are considered personal expenses and are not deductible.

Employer-provided meals may also be non-deductible if they are primarily a perk rather than a business necessity. While occasional staff meals may qualify, routine food provisions—such as daily catered lunches or stocked office kitchens—may be treated as taxable fringe benefits. In such cases, employers may need to report the fair market value of these meals as part of employees’ taxable wages.