Hospitality businesses have thin margins and a lot of moving parts, so getting the accounting basics right matters more than in most industries. The big ones are GST on food and drink, wages and payroll (including penalty rates and super), stock control, and using your point-of-sale data properly. Here is a plain-English guide for cafe, restaurant and bar owners.
GST on food and drink
GST in hospitality is not one-size-fits-all. Food sold to eat in and hot takeaway food are taxable, while some basic groceries are GST-free, and drinks vary. That means your point-of-sale system needs to code items correctly so your BAS is right, and errors here are a common cause of GST problems. Getting your POS set up properly at the start saves a lot of pain.
Wages, penalty rates and super
Payroll is usually a hospitality business’s biggest cost and its biggest compliance risk. You need to pay correct award and penalty rates, withhold PAYG, and pay 12% super, and from 1 July 2026 Payday Super requires super to be paid at the same time as wages. Getting payroll wrong is expensive, so clean systems and up-to-date awards are essential.
Stock, margins and cash flow
A few habits keep a hospitality business healthy:
- Track stock and wastage, since small leaks add up fast on thin margins.
- Watch your wage-to-revenue and food-cost percentages weekly, not yearly.
- Use cloud accounting linked to your POS so you always know where you stand.
How MS Financial Services can help
We help hospitality businesses with GST, payroll and real-time bookkeeping through our Accounting & Bookkeeping service. To tidy up your systems, get in touch.
Frequently Asked Questions
Is there GST on cafe food?
It depends. Dine-in food and hot takeaway food are taxable, while some cold basic groceries are GST-free, and drinks vary. Your POS needs to code items correctly for an accurate BAS.
What is the biggest compliance risk for hospitality?
Payroll. Correct award and penalty rates, PAYG withholding, and 12% super (paid on payday from 1 July 2026) are where most hospitality businesses get caught out.
How do I keep on top of thin margins?
Track stock and wastage, watch your wage-to-revenue and food-cost percentages weekly, and use cloud accounting linked to your POS for real-time numbers.
Do I need to register for GST?
Yes, once turnover reaches $75,000. Most hospitality businesses are over this, so registration and correct GST coding are essential.
Can a bookkeeper handle this for me?
Yes. Given the payroll and GST complexity, most hospitality owners are better off with a bookkeeper and accountant managing it so they can focus on the venue.