Every cost line in an Australian restaurant moved up at once in 2026. Award wages rose 4.75% from 1 July, the card-surcharge safety valve closes on 1 October, and out-of-pocket electricity bills jumped 37% in the year to February. Owners feel it as one giant squeeze — but you can only fix it line by line, and that means knowing where every dollar actually goes first.
This guide maps the full running costs of a typical independent Australian venue, puts a current 2026 number against each line, and names the single highest-return lever you have on each one. It's the page to read before you reprice a menu, renegotiate a contract, or decide which cost to attack first.
Key takeaways
- For a mid-sized Australian restaurant, the Australian Taxation Office benchmarks put cost of sales at 32–38% of turnover and labour at 23–32%, with total expenses at 84–93% — leaving a net margin of roughly 7–16% before the owner's own wage (ATO small business benchmarks, 2023–24).
- Labour and food are your "prime cost" — together they routinely eat 55–70% of revenue, so they're where the biggest savings live.
- Delivery apps take up to 30% of each order they carry; energy is the fastest-rising line; the card surcharge ban from 1 October 2026 removes a tool many venues lean on.
- Every line has one lever that actually moves the needle — get them right in order of size, not order of annoyance.
- Around one in ten hospitality businesses closed in the past year, so the stakes for getting this right are real (CreditorWatch, 2025).
Where does every dollar of restaurant revenue actually go in 2026?
For a typical mid-sized Australian restaurant turning over between $500,000 and $2 million a year, the ATO's own small business benchmarks give the clearest neutral picture of the cost stack. They're built from real tax returns across the industry, expressed as a share of turnover (excluding GST) (ATO small business benchmarks, 2023–24).
| Cost line | Share of revenue (mid-sized venue) | Direction in 2026 |
|---|---|---|
| Food & beverage (cost of sales) | 32–38% | Rising (input + freight costs) |
| Labour (wages, super, on-costs) | 23–32% | Rising (award +4.75%, super 12%) |
| Rent & occupancy | 8–12% | Rising / flat |
| Other expenses (delivery, card fees, energy, tech, insurance) | grouped within total | Mixed — several rising fast |
| Total expenses | 84–93% | — |
| Left for owner's wage + profit | ~7–16% | Squeezed |
Two things jump out. First, food and labour together — your "prime cost" — dominate everything else, so a one-point improvement there beats a heroic effort on a small line. Second, the lines the ATO rolls into "other expenses" — delivery commissions, card fees, energy, software, insurance — are precisely the ones moving fastest in 2026. The rest of this guide walks each line and the lever you have.
A note on those margins: when total expenses run 84–93% of turnover, there isn't much room left, and that's before the owner pays themselves. It's why a few points on the wrong line is the difference between a viable year and a painful one.
How much does labour really cost an Australian restaurant in 2026?
Labour is usually the single biggest cost an owner can actively manage — the ATO benchmark puts it at 23–32% of turnover for a mid-sized venue, and it stepped up again this year (ATO small business benchmarks, 2023–24).
Three things drive the 2026 number. Award minimum wages rose 4.75% from the first full pay period on or after 1 July 2026 (Fair Work Ombudsman, 2026). The super guarantee sits at 12% for 2026–27 (ATO, 2026). And penalty rates multiply the base across the hours you actually trade — under the Restaurant Industry Award, full-time and part-time staff attract 125% on Saturdays, 150% on Sundays and 225% on public holidays, with casuals carrying a 25% loading on top (Fair Work Commission MA000119). Because hospitality runs on weekends, that compounding hits harder here than in most industries.
The stakes are higher than the dollars, too: intentional underpayment of wages became a criminal offence from 1 January 2025 (Fair Work Ombudsman, 2025), so getting classifications and penalty rates right is now a compliance issue, not just a cost one.
The lever: roster to forecast demand, not habit, and get classifications and multipliers exactly right so you're neither underpaying (now criminal) nor overpaying through avoidable penalty hours. Our guide on how to pay penalty rates and stay compliant walks the full calculation.
What are food costs doing to your margin?
Cost of sales — food and beverage — runs 32–38% of turnover for a mid-sized restaurant, and 34–40% for a coffee shop, on the ATO benchmarks (ATO small business benchmarks, 2023–24). With input and freight costs still elevated, most venues are fighting to hold the line rather than improve it.
Food cost is unusual because you control it on two sides: what you buy and how you sell it. On the buy side, supplier reviews, order discipline and waste tracking move the number. On the sell side, menu engineering — pricing and positioning dishes by their margin and popularity — often does more than supplier haggling, because it shifts the mix toward your profitable plates without anyone feeling "put up".
The lever: set a target gross-profit percentage per dish, cost every recipe against it, and re-engineer the menu around your high-margin winners. A 2% improvement on a 35% food-cost line is worth more than most owners expect once it runs across a full year of covers.
How much are delivery apps taking — and is it the new rent?
Delivery commissions are the line owners most often call "the new rent", and the maths explains why. On the marketplace tiers, Uber Eats charges up to 30% for delivery, 16% for self-delivery and 6% for pick-up (Uber Eats, 2026), and DoorDash charges up to 30% for delivery and 15% for pick-up (DoorDash, 2026). (Menulog left the Australian market on 26 November 2025, so it's now a two-platform game — University of Sydney, 2025.)
On a $30 order, a 30% commission is $9 gone before you've paid for the food or the cook. The apps buy you reach you might not get otherwise — but every order that could have come direct and went through the app instead is margin you've rented out.
The lever: move repeat customers to a direct, commission-free ordering channel you own. The platforms are worth keeping for discovery; the goal is to stop paying 30% on the regulars who'd happily order from you directly. A simple branded ordering page — the kind tools like DineHere build from a menu photo in minutes — keeps that commission in your till. For the full per-order teardown, see what Uber Eats and DoorDash really cost Australian restaurants.
What do card payments cost now the surcharge ban is coming?
Card acceptance has been a quiet line for years because many venues simply surcharged it back to the customer. That option is closing: the Reserve Bank has confirmed that surcharging on debit and credit cards should end from 1 October 2026 (RBA, 2026). The same reforms lower the interchange caps businesses pay and require acquirers to publish their fees, which makes the cost easier to shop around — but the line itself doesn't disappear, it just lands back on you.
Most venues pay somewhere in the low single digits of each card sale once you blend interchange, scheme fees and the acquirer's margin — the only way to know your number is to read the "cost of acceptance" on your own merchant statement.
The lever: turn on least-cost routing so dual-network debit taps route via the cheapest network, read your merchant statement against the new published fees, and decide deliberately whether to absorb the cost or fold it into menu prices before October. The 1 October 2026 card surcharge ban checklist lays out the absorb-versus-reprice decision step by step.
Why are energy bills the line that's moved the most?
Energy is the line that's risen fastest and rattled owners most. On the official measure, out-of-pocket electricity costs rose 37.0% in the 12 months to February 2026 (ABS, 2026). That headline needs context, and the context matters for how you respond: most of the jump is the expiry of government electricity rebates, not a tariff explosion. Excluding the rebates, the ABS says underlying electricity prices rose 4.9% in the 12 months to February (ABS, 2026). In other words: your bill leapt because the cushion came off, so the fix is partly about clawing relief and tariff savings back.
There are real levers here. Eligible small businesses can claim up to $150 off electricity bills in 2025–26 under the National Energy Bill Relief program (NSW Government, 2026). And the bigger structural lever is electrification: a study by the Sustainable Restaurant Association and Global Cooksafe Coalition modelled that Australian restaurants can save up to 50% on energy costs and cut energy use by up to 64% by switching from gas to electric, noting induction appliances are "three times more efficient than gas stoves" (Global Cooksafe Coalition, 2026). Those are modelled, advocacy-sourced figures with upfront equipment costs, so treat them as a planning case rather than a guarantee — but the direction is clear.
The lever: review your tariff and contract annually (the published-fee transparency works in your favour), claim the bill-relief you're eligible for, and put gas-to-electric on the capital-planning list when equipment is due for replacement.
What about rent, tech and the other overheads?
Rent and occupancy run 8–12% of turnover for a mid-sized venue and as much as 11–17% for a smaller one, on the ATO benchmarks (ATO small business benchmarks, 2023–24). It's a "sticky" cost you can't change overnight, but lease outgoings, percentage-rent clauses and review timing are negotiable far more often than owners assume — especially at renewal.
The other overheads quietly add up. Tech fragmentation is a common one: a POS subscription, an online-ordering fee, a bookings tool, a roster app, an accounting package and a marketing platform can each look small while collectively running into a meaningful monthly figure. Insurance and ATO obligations round out the list.
The lever: audit your recurring software once a year and cut or consolidate anything you're not using, and put a lease-outgoings review on the calendar before each rent review rather than after.
When does each cost line move in 2026?
Part of why 2026 feels relentless is that the changes are stacked across the calendar rather than spread out. Here's the sequence to plan around:
- 1 July 2026 — award minimum wages rise 4.75%; super guarantee is 12% (Fair Work Ombudsman, 2026).
- 1 October 2026 — the card-surcharge ban takes effect (RBA, 2026).
- Ongoing through 2026 — energy bills reset higher as rebates expire (ABS, 2026).
Lining the dates up makes the repricing decision easier: if you're going to adjust menu prices, doing it once — deliberately, ahead of October — beats three small, reactive changes that confuse customers.
Which lever actually moves the needle on each line?
Attack costs in order of size, not order of irritation. Here's the whole stack with the single highest-return control on each line:
| Cost line | The one lever |
|---|---|
| Labour | Roster to demand; get classifications and penalty rates exactly right |
| Food / COGS | Menu engineering to a target gross-profit % per dish |
| Delivery commissions | Move repeat customers to direct, commission-free ordering |
| Card fees | Least-cost routing + a deliberate absorb-vs-reprice decision |
| Energy | Tariff review + bill relief + gas-to-electric at replacement |
| Rent & occupancy | Negotiate outgoings and review terms before renewal |
| Tech / SaaS | Annual audit; cut and consolidate unused subscriptions |
None of these is a silver bullet. But a couple of points recovered on labour and food, plus keeping the regulars off a 30% commission, typically does more for the bottom line than any single dramatic cut.
Why are so many Australian restaurants closing?
The squeeze is showing up in the failure data. Around one in ten hospitality businesses closed over the past year, and the Food and Beverage Services industry leads all sectors in business closures — ranking highest across closures, insolvencies and tax-debt defaults, according to CreditorWatch's Business Risk Index (CreditorWatch, 2025).
The lesson isn't despair — it's discipline. The venues that come through a year like this aren't the ones that found a single magic saving; they're the ones that knew their cost stack cold, attacked the biggest lines first, and made their repricing decisions on purpose. That's what this breakdown is for.
Frequently asked questions
What percentage of restaurant revenue goes to food and labour?
Together, food and labour — your "prime cost" — typically run 55–70% of turnover. The ATO benchmarks put cost of sales at 32–38% and labour at 23–32% for a mid-sized Australian restaurant (ATO, 2023–24). It's where the largest savings live.
What is a typical net profit margin for an Australian restaurant?
The ATO benchmarks imply roughly 7–16% of turnover is left after total expenses for a mid-sized venue (total expenses run 84–93%), and that's before the owner's own wage (ATO, 2023–24). Many independents run thinner than the top of that range.
How much do delivery apps charge Australian restaurants in 2026?
Up to 30% per delivered order on both major platforms — Uber Eats charges up to 30% for delivery, 16% self-delivery and 6% pick-up (Uber Eats, 2026); DoorDash up to 30% for delivery and 15% pick-up (DoorDash, 2026).
When does the card surcharge ban start?
Surcharging on debit and credit cards should end from 1 October 2026, per the Reserve Bank (RBA, 2026). After that date you can't add card costs as a separate line, so you absorb them or build them into prices.
Why did my electricity bill jump so much in 2026?
Mostly because government rebates expired. Out-of-pocket electricity costs rose 37.0% in the year to February 2026, but underlying prices (excluding rebates) rose 4.9% (ABS, 2026). The cushion came off rather than tariffs exploding.
How much can a restaurant save by switching from gas to electric?
A Sustainable Restaurant Association and Global Cooksafe Coalition study modelled savings of up to 50% on energy costs and up to 64% on energy use, with induction "three times more efficient than gas stoves" (Global Cooksafe Coalition, 2026). These are modelled figures with upfront equipment costs, so treat them as a planning case.
Is there any energy bill relief for small hospitality businesses?
Yes — eligible small businesses can claim up to $150 off electricity bills in 2025–26 under the National Energy Bill Relief program (NSW Government, 2026). Eligibility and delivery vary, so check your state's scheme.
How much did award wages rise in 2026, and when?
Award minimum wages rose 4.75% from the first full pay period on or after 1 July 2026, and the super guarantee is 12% for 2026–27 (Fair Work Ombudsman, 2026; ATO, 2026). Penalty rates multiply that across weekend and public-holiday hours.
What is least-cost routing and why does it matter now?
Least-cost routing sends dual-network debit taps via the cheaper network, lowering your card fees. With the surcharge ban from 1 October 2026 removing the ability to pass card costs on, switching it on is one of the few ways left to trim the line (RBA, 2026).
Which cost should I cut first?
Start with the biggest lines — labour and food — because a small percentage improvement there outweighs a large effort on a minor line. Then stop renting margin to delivery apps by moving regulars to direct ordering, and use the timeline to make one deliberate repricing decision rather than several reactive ones.
