What Is an Expense Account?

An expense account refers to an account in which all expenses related to an employee’s professional activities, or all types of expenses related to a company’s activities, are recorded.

What Expenses Can an Employee Declare in an Expense Account?

The expenses an employee can declare in an expense account vary from company to company and are stipulated by the employees’ employment contracts. Some examples of expenses that are generally approved include:

  • Meal expenses
  • Entertainment expenses
  • Travel expenses
  • Cell phone charges
  • Training fees
  • Expenses related to supplies and equipment
  • Professional dues

What Expenses Are Included as Entertainment Expenses on an Expense Account?

The following entertainment expenses are covered by an expense account:

  • Ticket prices for shows or sporting events
  • Gratuities
  • The cost of renting facilities where entertainment events take place

Who Is Entitled to Claim Entertainment Expenses?

Any employee is entitled to claim reimbursement for entertainment expenses if the expenses were incurred in the direct interest of the company, like for the purpose of earning business income, for example.

A company can set its own conditions for reimbursing entertainment expenses.

How Are Entertainment Expenses Calculated?

In Quebec, the deductible for the entertainment expenses is one of these two amounts, whichever is lower:

  • 50% of the reasonable expenses actually incurred
  • The threshold set based on the company’s sales

What Are Meal Expenses and What Is Included in this Category?

Meal expenses correspond to all company expenses related to food and beverages, such as:

  • Restaurant meals
  • Drinks at an event
  • Snacks for employees
  • Coffee and tea

Which Expenses Are Tax Deductible?

Tax-deductible expenses depend on the laws in place.

For example, in Quebec, an employee can claim a tax deduction for expenses incurred while working from home, or for professional dues.

In France, a flat-rate deduction of 10% is automatically calculated in employees’ salaries to take into account current business expenses related to their employment.

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