Industry

Accountants for cafés, restaurants, retail and takeaway

Registered tax agent · Shepparton North, by appointment · Australia-wide by phone, WhatsApp and video · Updated October 2026

Food and retail businesses run on thin margins, high transaction volumes and a roster that changes weekly. The accounting has to keep pace: a tax code on every item, a till that reconciles daily, award wages and super that leaves with each pay run. SMT Accounting handles that for cafés, restaurants, takeaways and shops on a fixed monthly fee.

On this page

GST on food: GST-free versus taxable

The same ingredient can be GST-free or taxable depending on how you sell it. The ATO's lists are the starting point:

Generally GST-free

Bread and rolls without sweet filling or coating, fresh or frozen fruit, vegetables, meat and fish, unflavoured milk, cheese and eggs, cooking ingredients, tea and coffee sold as preparations, plain still water and juice of at least 90% fruit or vegetable content.

Taxable

Anything consumed on your premises; all hot takeaway food and drinks; bakery items such as cakes, pastries, pies and sausage rolls; biscuits, chips, confectionery and ice cream; flavoured milk, soft drinks and sports drinks; food marketed as a prepared meal; platters.

Marketing matters

Labelling, packaging and placement can change the status. A snack pack combining a GST-free item with a taxable one is taxable as a whole; a hamper of separately packaged items is taxed item by item.

The ATO's detailed food list resolves most items, and food retailers with mixed sales may be able to use one of the ATO's simplified accounting methods. We set the tax codes in your point-of-sale and check them against the list before each BAS.

Tips, surcharges and the till

A genuine voluntary tip that you pass on to staff is not part of the price of the meal, so it carries no GST, provided your records show it went to the employees and was not kept as takings. A compulsory service charge, a set gratuity or a public holiday surcharge is part of the consideration and is taxable. Tips that stay with the business are assessable income. Card tips are the usual problem: unless the system separates them from sales, the business pays GST and income tax on money it handed to staff.

Cash reconciliation

Till reports, card settlements, delivery-platform payouts and cash banked should agree every day. The ATO's own audit example of a business outside the benchmarks turned on years of unreconciled sales and under-reported takings, with tax and penalties in six figures. The fix is a daily close that records float, cash sales, card sales, tips and payouts. Our bookkeeping service builds that routine into your software and reviews it monthly.

Award wages, penalty rates, STP and Payday Super

Hospitality and retail awards carry evening, weekend and public holiday penalty rates, casual loading and minimum shift lengths, so the roster must be costed on those rates. Every pay run is reported through Single Touch Payroll. From 1 July 2026, Payday Super requires super guarantee at 12% of qualifying earnings to be received by each employee's fund within 7 business days of payday, reported through STP with the wages. Eligible casuals have conversion rights under the Fair Work system; we flag the dates, and Fair Work handles the entitlement question. Our payroll and STP service runs the whole cycle.

Stock and cost of goods sold

Food, drink and retail stock are trading stock: closing stock at 30 June moves profit between years, and stock taken home for private use is income the ATO expects to see recorded. Regular stocktakes, a margin check by category and a wastage log produce the cost of goods sold figure the benchmarks, the bank and your pricing depend on.

Leases, fit-out and outgoings

Rent is deductible, and so is your share of outgoings such as council rates, insurance and centre marketing levies under a retail lease. A fit-out is capital: it is depreciated over its effective life or written off under the small business rules where each asset costs less than $20,000. Lease incentives, rent-free periods and make-good obligations each have a tax treatment, so we read the lease before you sign.

Food business and liquor registration

In Victoria, a food business is registered or notified with the local council under the Food Act, and selling alcohol needs the appropriate liquor licence. We do not advise on these, but the fees are deductible and we track the renewal dates.

ATO small business benchmarks and why they matter

The ATO publishes benchmark ratios for cafés, restaurants, takeaway food, pubs, bakeries and many retail categories. Reporting above the range for expenses suggests wastage, private stock, or sales not fully recorded; below it suggests expenses under the wrong label, unrecorded cash wages, or simply higher mark-up. The ATO says benchmarks are one of the tools it uses to identify businesses that may be avoiding tax and that it never uses them in isolation, but a business outside the range should be able to explain why with records. We run your figures through the ATO's business performance check before lodging and keep the explanation on file.

What SMT does for venues and shops

  • Bookkeeping with POS and delivery-platform feeds, daily cash reconciliation and tips tracked separately.
  • GST coding of the menu or product list and quarterly BAS lodgement.
  • Payroll and STP on award rates, with Payday Super paid in the same run as wages.
  • Stock, margin and benchmark reviews, lease reading, and year-end returns for the business and its owners.

Fixed monthly fee, a registered tax agent on every lodgement, and a first call that costs nothing.

General information, not advice. Checked against the ATO pages under Sources in October 2026; thresholds change and your position depends on your own facts, so talk to us before relying on it.
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Frequently asked

Are tips income for my café?

If customers tip voluntarily and you pass the tips on to staff, the ATO's position is that the tip is not consideration for the meal, so no GST applies, but you must keep records showing the tips were passed on and not kept as takings. A compulsory service charge or public holiday surcharge is part of the price and attracts GST. Tips a business keeps are assessable business income, whether cash or electronic.

Why do my sandwiches have GST but my bread doesn't?

Because the GST status of food depends on what it is and how it is sold. Plain bread, fresh fruit and vegetables, unflavoured milk and most basic ingredients are GST-free when sold to take away. Anything consumed on your premises, any hot takeaway food, and bakery items such as cakes, pies and sausage rolls are taxable. A GST-free bread roll becomes taxable the moment it is eaten at your table. Your point-of-sale system needs a tax code on every item.

What are the ATO small business benchmarks and should I worry about them?

They are ratios, such as cost of sales to turnover and total expenses to turnover, that the ATO publishes for industries including cafés, restaurants, takeaways and many retail categories. The ATO uses them, alongside other indicators, to find businesses that may not be reporting all their income; it says it never uses them in isolation. Being outside the range is not an offence, but you need to be able to explain why with records.

What changes for my casual staff from 1 July 2026?

Payday Super. Super guarantee at 12% of qualifying earnings must reach each employee's fund within 7 business days of payday instead of by the quarterly deadline, and it is reported through Single Touch Payroll every pay run. For a venue paying weekly, that means super leaves the account weekly. Separately, casual employees have rights under the Fair Work system to request conversion to permanent work after a qualifying period; Fair Work, not the ATO, administers that.

Sources

Café, restaurant or shop counter?

Send us a week of till reports, your roster and last quarter's BAS and we'll show you where the GST coding, the tips and the benchmarks stand.

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