Key Takeaways
- Generally, business lunches and coffees are considered "entertainment."
- Entertainment expenses are NOT tax-deductible for sole traders or employees.
- Companies can claim them but pay "Fringe Benefit Tax" (FBT) on the cost.
- Coffee for yourself at work is almost never deductible.
The Short Answer
No, not at all. The ATO considers coffee and lunches as "entertainment," which is explicitly excluded as a tax deduction for individual Australian taxpayers. Even if you're taking a client to lunch to discuss a major deal, you cannot claim it.
But My Coffee was for a Meeting!
This is a major misconception. Even if you hold a business meeting at a cafe, the coffee you (or your client) drink is considered entertainment. The only time food and drink become tax-deductible are when you are "traveling overnight for work" and claiming a meal allowance.
Companies and Fringe Benefit Tax (FBT)
If you have a company structure, the business can pay for the lunch, but it must then pay Fringe Benefit Tax (FBT) on that entertainment expenditure. The complexity of FBT often means it's simpler to pay for these lunches from your own pocket rather than trying to process them through the business's books.
Wait, what if I'm Traveling?
If your work requires you to stay overnight away from home, you can claim the actual cost of your meals (dinners, lunches, and breakfasts) or a reasonable allowance. This is because these expenses are seen as necessary while you are on a "business trip."
The 2026 Audit Ready Tip
If you're a networking whiz, keep your receipts for your own records, but don't include them in your tax return. Instead, focus on claiming the travel costs (Uber or car km) to and from those networking meetings, which often *are* deductible.
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