Restaurant accountant in Saskatoon

Tips and payroll

How tips move decides how they are taxed. Tips customers hand directly to a server are the server’s income, but the employer does not withhold CPP or EI on them. Tips the employer controls, collected into the business’s account and shared out by a formula the owner sets, are treated as pay, with income tax, CPP and EI to match and the amounts on each T4.

Card tips added at the terminal are where most restaurants drift into the controlled category without deciding to. It is worth choosing the system deliberately, writing it down and running payroll to match. Restaurant tip reporting covers the details.

Kitchen staff who share in a tip-out raise the same question. If the pool is run by the house, their share is controlled too. If servers tip out cooks by their own arrangement, it usually is not. Either can work; what fails is a system that changes from shift to shift.

Reconciling the POS to the bank

The POS says what was sold. The bank says what arrived. In between sit card batches that settle a day or two later net of processing fees, and delivery apps that pay weekly net of commission. There are also gift cards sold but not yet redeemed, and cash that has to agree to the till count. A restaurant that books deposits as sales understates both revenue and fees, and its tax returns will not match its POS reports.

Daily sales summaries recorded gross, with each deduction booked as an expense, fix that. Reconciled monthly, the ledger shows real food and labour percentages and gives the sales-tax returns a figure that can be defended. Bookkeeping in Saskatoon runs on that routine.

GST and PST on meals

Restaurant meals are subject to GST, and in Saskatchewan restaurant meals and beverages are generally subject to PST as well, on a separate registration and return with the Ministry of Finance. Alcohol has its own provincial treatment. Some items sold to take away may be treated differently from food eaten in. The POS has to be set up so each item carries the right tax, because a single wrong default repeats on every sale.

GST paid on supplies, equipment and rent comes back as input tax credits; PST paid on things the restaurant uses itself generally does not. The rates are on the Saskatchewan tax facts page, and the GST calculator handles the federal side.

Catering and private events are worth a separate line in the POS. Deposits taken weeks ahead are recorded as a liability until the event and as sales when it happens, so revenue lands in the month it was earned and the returns follow the same records.

Food cost is the number that decides the year

Food and beverage cost as a share of sales tells an owner more than any other figure, and it only means something when inventory is counted. A count at each month-end, or at least each quarter-end, turns purchases into cost of sales and shows waste, theft and menu pricing problems while they can still be fixed. Liquor is counted separately from food, because its margins and its losses behave differently, and a bar that only counts at year-end is guessing for eleven months.

At year-end the count also sets the inventory on the balance sheet, which affects taxable income directly. The year-end inventory count sets out what to record.

Equipment, leaseholds and renovations

Ovens, coolers, furniture and POS hardware are recovered through CCA. Improvements to leased premises, a new bar, walls, plumbing and ventilation, are leasehold improvements, written off over the lease term rather than as equipment. A renovation mixes both, and the invoices are split so each piece lands in the right class. Small repairs are expenses; a remodel is capital. Getting the split right at the start saves a disagreement later.

Tenant allowances from a landlord are part of the same picture. Money received toward the fit-out can reduce the cost of the improvements or be taken into income, and the choice affects several years of deductions. CCA classes sets out where each asset belongs.

Seasons, students and the patio

Saskatoon restaurants feel the university term in both customers and staff, the long winter in traffic, and a short, intense patio season in revenue. Hiring for summer and letting go in the fall means Records of Employment, final pay and vacation pay calculated under Saskatchewan employment standards, and a payroll that grows and shrinks several times a year.

Cash follows the same curve. Rent and loan payments do not, so a forecast that plans for the lean months is worth more than a strong July. Managing cash flow in a seasonal business goes further.

What EverStone handles for you

One CPA, one fixed fee agreed up front:

• Monthly books with POS, card, delivery and cash reconciled
• Payroll with tips handled consistently
• GST and Saskatchewan PST returns
• Inventory and food-cost reporting
• Equipment and leasehold schedules
• T2 corporate return and year-end statements

Monthly bookkeeping starts from $300 a month with GST filing included. See what it costs.

An owner drawing from the till instead of paying a salary or dividends leaves a shareholder loan to be dealt with at year-end; salary versus dividends covers the choice. Books already months behind can be brought current with catch-up bookkeeping.

Payroll is often the heaviest recurring task in a restaurant; see payroll services in Saskatoon and, for the year-end, corporate tax in Saskatoon.

Remote restaurant accounting from Abbotsford

Restaurant accounting for Saskatoon clients is delivered remotely from 32615 South Fraser Way in Abbotsford. There is no Saskatoon office and no local staff. POS reports, supplier invoices and timesheets arrive through a secure upload link, and meetings are booked by video or phone outside service hours, so nobody leaves the kitchen for an appointment.