Every plate you sell carries a tax decision. Charge too little and the Canada Revenue Agency still wants its cut — out of your own pocket. Charge the wrong rate, or zero-rate something you should have taxed, and your receipts won't hold up in a review. For an owner already squeezed on labour and food costs, a GST/HST mistake is one of the most avoidable line items on the books, and one of the easiest to fix once the rules are clear.
The stakes are real. As of November 2025, 44% of Canadian restaurants were operating at a loss or just breaking even — 26% losing money and 18% breaking even — up from just 12% in 2019 (CBC News, 2026). When margins are that thin, handing the CRA tax you forgot to collect from customers is a hit you can't take.
This checklist walks you through it in plain terms: who has to register, which rate to charge in your province, how to tell taxable prepared food from zero-rated groceries, the Ontario small-order rebate, delivery-app orders, and how to file and remit without nasty surprises.
Key takeaways
- You must register once your taxable sales top C$30,000 over four consecutive calendar quarters — and a busy restaurant clears that fast (Canada Revenue Agency, 2024).
- Your rate depends on your province: 5% GST in Alberta and the territories; 13–15% HST in Ontario and Atlantic Canada (Nova Scotia dropped to 14% on 1 April 2025); and 5% GST plus a separate provincial tax in British Columbia, Saskatchewan, Manitoba and Quebec (Canada Revenue Agency, 2026).
- Prepared and heated food you serve is taxable; basic groceries are zero-rated (0%). Mixing the two up is the classic restaurant error (Canada Revenue Agency, 2026).
- Ontario rebates the provincial part of HST on qualifying prepared food and drinks priced C$4 or less, so you collect only the 5% federal part on those items (Canada Revenue Agency, 2010).
- You hold every GST/HST dollar in trust for the CRA, file each reporting period, claim input tax credits on your business purchases, and keep records for six years (Canada Revenue Agency, 2026).
Why GST/HST is so easy to get wrong in a restaurant
The trap is simple to fall into: not all food is taxed the same way. Basic groceries are zero-rated — taxed "at the rate of zero (0% GST/HST) in every province and territory" (Canada Revenue Agency, 2026). But the moment food is prepared and served for immediate eating, it becomes taxable.
The dividing line is whether the food is ready to eat. As one Canadian accounting firm puts it, "foods sold hot (from heated cabinet, separate take out counter, or heated at point of purchase) are not a basic grocery and therefore are subject to GST/HST," and "sandwiches that are not frozen are taxable" (RLB LLP). A hot coffee, a slice of pizza, a made-to-order sandwich, a single scoop in a cone — all taxable. A sealed bag of beans you sell to take home, or a dozen unheated bagels packaged to go, can land on the zero-rated side as basic groceries.
For a sit-down or takeout restaurant this is usually clean — almost everything you serve is prepared food, so it's taxable. The errors creep in at the edges: a retail shelf of packaged goods, whole cakes or loaves sold to take away, catering, or a deli counter that sells both heated and cold items. If you run any of those, sort your menu into "taxable prepared food" and "zero-rated grocery" once, in writing, and build it into your POS — guessing item by item at the till is how you end up under-collecting and owing the difference yourself.
What GST/HST rate do you charge?
Canada runs three different sales-tax systems, and which one you're in depends on your province — what the CRA calls the place of supply (Canada Revenue Agency, 2026). For a restaurant serving customers on-site, that's simply where your restaurant is.
| Province / territory | GST or HST you charge | Separate provincial sales tax |
|---|---|---|
| Alberta | 5% GST | None |
| British Columbia | 5% GST | 7% PST |
| Saskatchewan | 5% GST | 6% PST |
| Manitoba | 5% GST | 7% RST |
| Quebec | 5% GST | 9.975% QST |
| Ontario | 13% HST | — |
| Nova Scotia | 14% HST | — |
| New Brunswick | 15% HST | — |
| Newfoundland and Labrador | 15% HST | — |
| Prince Edward Island | 15% HST | — |
| Northwest Territories, Nunavut, Yukon | 5% GST | None |
Source: Canada Revenue Agency, 2026.
Two things every owner should note. First, Nova Scotia's HST dropped to 14% on 1 April 2025, when the province cut its provincial portion to 9% (Canada Revenue Agency, 2026). If your POS still has the old 15% loaded, you're over-charging customers.
Second, in the GST-plus-provincial provinces (BC, Saskatchewan, Manitoba and Quebec), whether that separate PST, RST or QST applies to your meals depends on the province and what you're selling (prepared food versus alcohol, for example). Quebec applies its 9.975% QST to restaurant meals — administered by Revenu Québec, not the CRA — while other provinces treat food differently. Don't assume the table's provincial rate automatically lands on every dish; confirm the food-specific rules with your provincial tax authority before you set your till. In the HST provinces (Ontario and Atlantic Canada) it's simpler: the single HST rate covers it.
The GST/HST compliance checklist for Canadian restaurants
Work through these in order. The first three are about charging correctly; the rest are about keeping what you collect clean and handing it over on time.
1. Confirm whether you have to register
You have to register for a GST/HST account once you stop being a "small supplier" — that is, once your taxable revenues exceed C$30,000 over four consecutive calendar quarters (Canada Revenue Agency, 2024). Cross C$30,000 in a single quarter and you're no longer a small supplier from that sale onward. For any real restaurant that's a low bar — you'll likely need to register from day one. Once registered, you charge GST/HST on every taxable sale, full stop.
2. Charge your province's rate
Load the correct rate from the table above into your POS and your online-ordering menu, and check it after any provincial change (like Nova Scotia's 2025 cut). One rate, applied consistently, on every taxable item.
3. Get the taxable-vs-zero-rated call right
Tag every menu and retail item as taxable prepared food or zero-rated basic grocery, as covered above. When in doubt about an edge case (whole cakes, packaged goods, catering), check the CRA's guidance or ask your bookkeeper rather than guessing — the cost of mis-categorizing lands on you, not the customer.
4. Apply the Ontario small-order rebate (Ontario only)
If you operate in Ontario, there's a point-of-sale rebate you should be applying automatically. Qualifying prepared food and beverages "ready for immediate consumption" with a total price of C$4 or less (before HST) get the 8% provincial part of the HST rebated — so "the restaurant collects only the 5% federal part of the HST" on those items (Canada Revenue Agency, 2010). A C$2.50 coffee or a C$4 muffin should ring up at 5%, not 13%. Most Ontario POS systems handle this if it's switched on — confirm yours does.
5. Handle delivery-app orders correctly
When a customer orders through SkipTheDishes, DoorDash or Uber Eats, two separate supplies are happening: the meal you provide to the customer, and the delivery/service the platform provides — the CRA treats these as separate transactions (Canada Revenue Agency, 2025). Your job is the tax on the food, at your province's rate. Reconcile each platform's payout statements so the tax you're accounting for matches the meals you actually supplied, and confirm with each platform how tax on your menu prices is collected and reported. (For the full breakdown of what these platforms cost beyond tax, see what SkipTheDishes, DoorDash and Uber Eats really cost Canadian restaurants.)
6. Show GST/HST correctly on every receipt
Your receipts and invoices must tell the customer whether GST/HST applies and show "the GST/HST rate that applies to the supply," with the tax shown as a separate line or a clear statement that it's included (Canada Revenue Agency, 2026). In an HST province, show the total HST rate — don't split out the federal and provincial parts. Clean receipts also matter for any business customer who needs them to claim their own input tax credits.
7. Claim your input tax credits
Registration cuts both ways. You can claim input tax credits (ITCs) to recover the GST/HST you pay on business purchases and expenses — ingredients, packaging, equipment, rent where tax applies (Canada Revenue Agency, 2026). Keep the supplier invoices that support every claim; what you remit is the tax you collected minus your eligible ITCs.
8. File, remit, and keep your records
The GST/HST you collect isn't yours — "you are responsible to hold the GST/HST in trust until you send it to the Canada Revenue Agency" (Canada Revenue Agency, 2026). File your return and remit each reporting period, on time. And keep the records behind every figure: "usually, you must keep your records for six years from the end of the last year to which they relate" (Canada Revenue Agency, 2026). A tidy trail is your best defence if the CRA ever asks questions.
Do you still need to worry about the GST/HST holiday?
No — it's over. There was a temporary GST/HST break "from December 14, 2024, to February 15, 2025," during which prepared meals and most non-alcoholic and many alcoholic beverages served at restaurants were temporarily tax-free (Canada Revenue Agency, 2025). That window has closed: businesses were told to "resume charging the GST/HST" from 16 February 2025. If any holiday-era settings are still lingering in your POS, clear them — you should be charging your normal provincial rate on everything taxable again.
Frequently asked questions
Do restaurants charge GST or HST on takeout food in Canada?
Yes. Prepared takeout food is taxed the same as dine-in — at your province's GST/HST rate — because it's ready for immediate consumption rather than a basic grocery (Canada Revenue Agency, 2026).
Is prepared restaurant food taxable when groceries aren't?
Yes. Basic groceries are zero-rated at 0%, but food that's heated or prepared for immediate eating — including non-frozen sandwiches and hot drinks — is taxable (RLB LLP).
What GST/HST rate do I charge in Ontario?
13% HST, with a point-of-sale rebate that drops qualifying prepared items priced C$4 or less to just the 5% federal part (Canada Revenue Agency, 2010).
Did Nova Scotia's HST rate change?
Yes. Nova Scotia's HST decreased to 14% on 1 April 2025 when the province cut its provincial portion to 9% (Canada Revenue Agency, 2026).
When do I have to register for GST/HST?
Once your taxable revenues exceed C$30,000 over four consecutive calendar quarters — or in a single quarter — you must register (Canada Revenue Agency, 2024).
How does the Ontario C$4 prepared-food rebate work?
For qualifying prepared food and drinks totalling C$4 or less before tax, you collect only the 5% federal part of the HST and the 8% provincial part is rebated at the point of sale (Canada Revenue Agency, 2010).
How is tax handled on SkipTheDishes, DoorDash and Uber Eats orders?
The meal you supply and the platform's delivery service are treated as two separate supplies; you account for the tax on the food at your provincial rate, so reconcile each platform's payouts against the orders you fulfilled (Canada Revenue Agency, 2025).
Do I charge PST or QST on restaurant meals?
It depends on the province. In HST provinces the single HST rate covers everything; in Quebec, QST applies to restaurant meals; in other GST-plus-provincial provinces, confirm whether the provincial tax applies to food with your provincial tax authority.
Can I claim back the GST/HST I pay on supplies?
Yes. As a registrant you claim input tax credits for the GST/HST paid on eligible business purchases, and remit the difference between tax collected and ITCs (Canada Revenue Agency, 2026).
Is the GST/HST holiday still in effect?
No. The temporary break ran from 14 December 2024 to 15 February 2025 and has ended; charge your normal rates (Canada Revenue Agency, 2025).
Getting GST/HST right is mostly about doing the boring parts consistently: the correct rate loaded everywhere you take money, a clean split between taxable and zero-rated items, and records that match what you remit. Set it up once across your POS, your card terminal and your own online-ordering page, and it largely runs itself — leaving you to worry about the costs that actually need your attention.
