Question 1

Do restaurants need to include tips in employee payroll?

Accepted Answer

Yes. Tips and gratuities are taxable income for employees. Controlled tips — those collected by the employer and distributed to staff — must be included in payroll and are subject to CPP, EI, and income tax deductions. Direct tips received by employees from customers are reported on the employee's personal tax return, but employers must track and report them appropriately. We ensure your tip handling is compliant and your payroll reflects the CRA's rules.

Question 2

How does GST/HST work for restaurants?

Accepted Answer

Restaurant meals (eaten on premises or take-out orders over $4) are generally taxable at the full GST/HST rate. Basic grocery items (unprepared food) are zero-rated. We ensure your POS categories reflect the correct tax treatment, prepare your GST/HST returns, and claim all input tax credits on food, supplies, and equipment purchases.

Question 3

How do I track food costs and inventory for my restaurant?

Accepted Answer

Food cost is typically the single largest expense for a restaurant — and the hardest to track given perishables and daily waste. We work with your purchase invoices and supplier statements to track food costs monthly against your sales, giving you a clear cost-of-goods picture so you can manage margins proactively.

Question 4

What payroll obligations do I have for restaurant staff?

Accepted Answer

All employees — kitchen, front of house, management, and casual staff — require proper payroll with CPP, EI, and income tax deductions. We handle every pay cycle, manage statutory holiday pay calculations, issue pay stubs, remit source deductions, and produce T4s at year-end.

Question 5

The CRA has been known to audit restaurants — how do I protect myself?

Accepted Answer

The CRA's Net Worth Audit and Restaurant Project have historically targeted the food service industry for unreported cash income. The best protection is clean, consistent books with daily POS reconciliation against bank deposits. We maintain this standard every month so your records are always defensible — and any CRA inquiry can be handled with confidence.

Question 6

Can I deduct meals and entertainment at my restaurant?

Accepted Answer

Meals you provide to employees as part of their duties are deductible. Business meals with clients or partners are deductible at 50%. However, the CRA scrutinizes food-related deductions for restaurants closely, so proper documentation is essential. We ensure all meal-related deductions are correctly categorized and supported.

Question 7

How do I handle multiple payment types — cash, debit, and credit cards?

Accepted Answer

We reconcile all payment methods — cash, debit, credit card, and delivery platforms like Uber Eats or DoorDash — against your daily POS reports and bank deposits every month. This catches discrepancies, processor fees, and platform chargebacks before they accumulate into a year-end problem.

Question 8

What records does my restaurant need to keep?

Accepted Answer

All daily POS reports, purchase invoices, payroll records, bank statements, and tip records must be kept for a minimum of six years. For restaurants with cash sales, the CRA expects daily reconciliation records. We organize and maintain these from day one so you are always audit-ready.

Run Your Kitchen.
We'll Run Your Numbers.

What Restaurant Owners Deal With

Cash & POS Reconciliation

Tip & Gratuity Reporting

CRA Audit Risk

Services for Restaurants

Monthly Bookkeeping

Payroll & Tip Reporting

GST/HST Filings

Year-End Support

Annual Tax Returns

CRA Support

Restaurant Questions — Answered

Useful Articles for Restaurant Owners

CRA Payroll Remittances: Deadlines and Penalties

How to File GST/HST for Small Businesses

Your Restaurant Runs on Tight Margins.
Your Books Should Run on Clean Numbers.

Run Your Kitchen.We'll Run Your Numbers.