Food Service, Cafés & Catering

Margins are thin, staff turnover is constant, and the CRA pays close attention to cash businesses. Clean books aren't just for tax season here — they're how you spot food costs drifting before they eat a quarter's profit.

Restaurants & Hospitality

Restaurants are a cash-and-margin business with more tax touchpoints than almost any other small operation: payroll, tips, sales tax, spoilage, and thin profits that punish sloppy books.

How we help

  • Monthly bookkeeping with food and labour cost tracking against sales
  • Payroll for hourly staff, including source deductions and records of employment
  • Tip reporting handled correctly — tips the business pools or distributes (controlled) run through payroll with CPP and EI, while tips guests hand straight to staff (direct) do not
  • GST and PST on food service, where the rules differ from groceries
  • Cash handling procedures that stand up to a CRA review
  • BC Employer Health Tax and WorkSafeBC filings as your payroll grows

Common mistakes we see

  • Handling tips incorrectly. Tips the employer controls — pooled, added to bills, or distributed by the house — are pensionable and insurable payroll; tips paid directly by guests to staff are not. Mixing them up creates CPP/EI remittance problems.
  • Running personal and restaurant spending through one account, then losing legitimate GST input tax credits because the records won't support them.
  • Not reconciling POS sales to bank deposits, which is exactly the gap the CRA looks for in a cash-heavy business.
  • Ignoring inventory and spoilage tracking, so food cost — the number that decides whether the place survives — is a guess.

The British Columbia angle

In BC, restaurants navigate GST on most food service alongside PST on liquor, plus liquor-licensing records that have to hold up. Payroll crossing the Employer Health Tax threshold of $1,000,000 in BC payroll catches growing groups off guard. We keep the sales-tax split and the payroll side clean.

The two things that keep a kitchen solvent

Service Food cost, tips and the POS reconciliation Monthly books that tie POS sales to bank deposits, controlled tips run through payroll with CPP and EI, and the GST and PST split on food service kept straight. Service A year-end for a cash business Statements and a T2 built on reconciled records, so the margins stand up if the CRA asks how a cash-heavy operation arrived at its numbers. Service A second location, or an exit What the numbers say before you sign another lease, and how a sale is structured when the lease and the equipment carry most of what you are selling.
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