Who this is for
Owners of restaurants, cafes, food trucks, catering and tiffin businesses, incorporated or not, in the last month or two before the fiscal year end.
The seven numbers
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Gross sales by channel. Dine-in, takeout, each delivery app, catering. Taken from the point-of-sale and app reports, not from bank deposits. If the two differ by more than the fees, something is missing.
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Food and beverage cost as a percentage of sales. Purchases adjusted for opening and closing inventory, divided by sales. A jump without a menu change usually means missing sales or unrecorded waste.
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Labour cost, all in. Wages plus the employer’s CPP and EI, plus WorkSafeBC. Compare to sales. This is also the check that payroll remittances have gone in every month.
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GST collected versus GST remitted. The GST on your gross sales for the year should match what the returns remitted, less input tax credits. A gap means either the sales figure or the returns are wrong.
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Tips. Card and app tips that the business controls go through payroll. Confirm they did, and that the T4s will show them.
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Inventory on hand. Count food, beverages and packaging on the last day of the year and value it. It is required, and it is the number most restaurants skip.
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Owner transactions. Every payment to you and every deposit from you, with what it was. For a corporation, salary and dividend decisions should be recorded before year end, not reconstructed after.
One thing many people do not realize
Year-end inventory is a number the CRA expects, not an estimate. Food, beverages and packaging on hand at the last day of the year are counted and valued. That figure moves the cost of goods sold and the profit. A restaurant that never counts is reporting a profit figure nobody can defend.
What to prepare
- Point-of-sale and delivery app annual reports
- Payroll summaries and remittance confirmations
- GST returns filed in the year
- A plan for the year-end count
- A list of owner transfers with dates
When professional help may make sense
If more than two of the seven numbers are unknown, the books need attention before the return is prepared. That is a bookkeeping job first and a tax job second.
How Rex Tax may be able to help
We do monthly bookkeeping and year-end preparation for food businesses, and we set up the routine that makes next year’s seven numbers easy to find.
Official sources
- CRA guide T4002, chapter 2: inventory and cost of goods sold
- CRA: Tips and gratuities, CPP and EI explained
This guide is general information, not advice about your situation. It reflects the rules for the 2026 tax year. It has not yet been reviewed by a practitioner. The information was checked against the official sources listed above on the date shown. Rules change. Check the official sources above or ask us. How we prepare these guides.