Tax deductions and accounting for restaurants.
You can generally claim your kitchen equipment, fit-out, liquor licensing and staffing costs against your restaurant income, provided each one relates to earning it and you keep the records to prove it. This guide covers what restaurant owners typically claim, how GST applies to a full dining menu, and how we keep the numbers current between services. We're Brisbane based and work with restaurants right across Australia.
Updated July 2026 · Reviewed by the LINK Advisors team
What restaurants can claim.
Ordered by typical value. Every claim still has to pass the ATO's tests: you paid for it, it relates to earning your income, and you can show a record.
Kitchen equipment and appliances
Commercial ovens, cooktops, coolrooms and other kitchen equipment are generally deductible, either claimed outright or depreciated depending on the cost and the instant asset write-off rules current at the time - check the current threshold with us.
Fit-out and leasehold improvements
Dining room fit-out, kitchen build, bar joinery and any works done to the tenancy are generally deductible over their effective life.
Food and beverage stock
Ingredients, wine and beverages bought to serve are generally deductible as a cost of goods sold, tracked through your kitchen and bar stock system.
Liquor licensing fees
Where you hold a liquor licence, the licensing and renewal fees are generally deductible as a cost of running the venue.
POS, reservation and ordering software
Subscriptions to your point-of-sale, table booking and online ordering platforms are generally deductible as ongoing running costs.
Staff wages and on-costs
Wages, superannuation and leave for chefs, kitchen hands and floor staff are generally deductible, and correct award classification across a mixed team of casual, part-time and full-time staff matters more as headcount grows.
Staff meals and entertainment
Meals provided to staff during a shift can touch fringe benefits tax depending on how they're provided, so it's worth getting this treatment right rather than assuming it's automatically exempt.
Uniforms and linen
Chef whites, branded floor staff uniforms and linen used in service are generally deductible.
Marketing and reputation management
Photography, website costs and paid promotion, including managing your presence on booking and review platforms, are generally deductible.
Chef and hospitality training
Courses that build your kitchen or front-of-house team's skills, and food safety training required for your licence, are generally deductible.
GST and BAS, done right.
Meals served in a restaurant are a taxable supply regardless of what the ingredients were before you cooked them, so you charge GST on the full menu price, food and beverage alike, once you're registered. This is different to a cafe or grocer selling packaged basic food, and it's a common point of confusion for owners moving from one hospitality format to another.
On the buying side, some raw ingredients you purchase are GST-free while others, like most beverages and processed goods, are taxable, so your GST credits come from a mix of stock purchases plus your kitchen equipment, fit-out and overheads. Wine and other alcohol you buy in for the bar generally carries GST you can claim as a credit.
If you take deposits for functions or large bookings well ahead of the event, the GST timing on that deposit needs to be handled correctly against when the supply actually happens. We set this up in Xero so a busy events calendar doesn't turn into a BAS headache later.
The right structure for the work.
Restaurants generally carry more going on at once than a cafe, a liquor licence, a bigger team, higher stock values and often longer trading hours, and that combination pushes plenty of owners toward a company structure sooner for the cleaner separation of business and personal risk. A single small restaurant can still run well as a sole trader in the early stages. The right time to move usually tracks with your licensing, staff numbers and how much you've got tied up in fit-out and equipment.
Run the work, we run the numbers.
Kitchen display systems, reservation platforms and stock costing software connected to Xero give you a much clearer read on food cost percentage and labour cost than a POS report alone. We set these connections up properly so your weekly numbers reflect what a service actually cost, not just what was banked, and keep the Xero side clean so you can see margin trends before they become a problem.
Frequently asked questions.
Can I claim my liquor licence fees?
Yes, generally. Liquor licensing and renewal fees are deductible as a cost of running a licensed venue, the same way any other regulatory or compliance cost tied to earning your income would be.
Are staff meals during a shift tax deductible, and does FBT apply?
Meals provided to staff can be deductible to the business, but how they're provided affects whether fringe benefits tax comes into play. We look at how your kitchen handles staff meals and set the treatment up correctly rather than assuming either way.
How does GST work on function deposits taken months in advance?
GST timing generally follows when the supply happens or when the payment is treated as consideration for it, which needs care when deposits are taken well ahead of an event. We set your booking and Xero workflow up so deposits don't create a GST surprise later.
Should a growing restaurant move from a sole trader to a company?
Often yes, and usually earlier than for a smaller hospitality format, given the liquor licensing, staff numbers and fit-out value most restaurants carry. It's worth a proper conversation once you're past the earliest stage rather than defaulting either way.
How do I keep food cost percentage under control?
Consistent stock counting, recipe costing and matching your POS sales data against purchases in Xero is what makes food cost visible week to week rather than a surprise at year end. We help set that system up once so it keeps working without constant manual effort.
Talk to an accountant who knows restaurant businesses.
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