Tax on Restaurant Food in BC: What You Actually Pay

What is the tax on restaurant food in BC? Just the 5% GST. British Columbia exempts food for human consumption from its provincial sales tax, and that exemption covers restaurant meals — so the only sales tax on your food is federal. The bill stops being simple the moment drinks arrive: liquor carries 10% PST and soda carries 7%, each stacked on top of the GST.

Five per cent, and it is entirely federal. BC's provincial sales tax exempts food for human consumption, and unlike several other provinces it does not carve restaurant meals out of that exemption — prepared food, dine-in or takeout, sits inside it. So the tax line on a BC restaurant bill for the food alone is the 5% GST and nothing else.

That makes BC one of the cheaper provinces in the country to eat out in, tax-wise. The same meal in Ontario carries 13% HST. In Alberta, which has no provincial sales tax at all, the answer matches BC's 5% — but Alberta gets there by having no PST to exempt anything from, while BC gets there by a deliberate exemption.

The confusion, and the reason this question gets asked so much, is that the total at the bottom of a real bill is often more than 5% of the subtotal. That is not the food being taxed twice — it is the drinks. BC applies PST to two categories that commonly share the table with an exempt meal: liquor at 10% and soda at 7%. A table that orders a pizza, two beers and a cola is buying items in three different tax treatments on one bill.

Everything below unpacks that line by line — first for the person reading the bill, then for the owner who has to program the till, because the same rules read very differently from the two sides of the counter.

Take a table that orders $60 of food, a $9 glass of wine and a $4 soft drink. Worked through, the tax comes out like this: the $60 of food attracts $3.00 of GST and no PST. The wine attracts 45 cents of GST and 90 cents of PST. The soft drink, if it is a sweetened carbonated one, attracts 20 cents of GST and 28 cents of PST. Total tax: $4.83 on a $73 subtotal — about 6.6%, even though no single item on the bill is taxed at 6.6%.

That blended rate is why eyeballing a bill misleads. The more the table drinks, the higher the effective rate climbs; a food-only order sits at exactly 5%, and a bar tab tilts toward 15%.

Two more line items behave in ways people do not expect. A mandatory gratuity or service charge — the automatic 18% some restaurants add for large groups — is generally part of the price of the meal, and is taxed the way the meal is. A voluntary tip you choose to leave, whatever the amount, is not part of the price and attracts no tax. The same dollars, taxed differently depending on whether you had a choice.

Delivery apps add one more layer: their service and delivery fees are separate supplies with their own tax treatment, which is why the tax on a delivered meal rarely matches the tax on the same meal at the table. The food component itself keeps its 5%.

Alcohol is the largest exception on the bill. BC charges PST on liquor at 10% rather than the general 7%, and the GST applies on top, so a drink carries 15% in combined sales taxes. The 10% applies to the selling price of the liquor including extras folded into it — a chill charge, for instance — though not to the GST itself or to refundable bottle deposits.

This is why a dinner for two with a bottle of wine shows a tax line well above 5% of the subtotal, and why the same bottle looks different on a restaurant bill than at a government liquor store: the rate is the same, but the base price it applies to is the restaurant's markup, not the shelf price.

For the kitchen, the boundary questions cluster around cooking wine, corkage and happy-hour pricing. Corkage — the fee for opening a bottle the guest brought — is a service connected to liquor, and the till has to treat it correctly. Happy-hour discounts reduce the base the 10% applies to, which is straightforward as long as the discount is genuinely off the liquor line rather than spread across the bill.

For the guest, the practical takeaway is simply that the drinks column is where the tax lives. A $73 table that swaps the wine and soda for tap water pays $3.00 in tax instead of $4.83.

Since 2021, BC has charged PST at 7% on soda beverages — sweetened carbonated drinks — everywhere they are sold, restaurants included. Stacked with the GST, a fountain cola carries 12% while the meal beside it carries 5%.

The line is drawn around sweetened and carbonated. Plain coffee, tea, juice, milk and bottled water stay inside the food exemption at 5% total. The drinks that moved out of the exemption are the ones a dentist would guess: pop, sweetened sparkling drinks and their fountain equivalents.

For a till, this is the single most common programming miss in the province, in both directions. Some systems charge 7% PST on every beverage — overtaxing the orange juice — and some charge none, undertaxing the cola. Neither error announces itself on a busy night, and both compound one transaction at a time: overcharge and the customers quietly paid tax the restaurant now holds without a clean way to return it; undercharge and the PST the province expected was never collected, which becomes the restaurant's own bill in an audit.

For the reader checking a receipt: a 12% tax line against a soft drink is not a mistake, and a 12% line against a sandwich is. That single distinction resolves most of the receipt photos that get sent to us.

The tip line deserves its own section because the rule turns on one word: choice.

A tip you decide to leave — whatever the percentage, however it is paid — is not part of the price of the meal. No GST, no PST. The suggested percentages on the payment terminal do not change that; a suggestion accepted is still voluntary.

A gratuity the restaurant adds automatically — the mandatory 18% for parties of eight, a fixed service charge on a tasting menu, a banquet room fee expressed as a percentage of food — is part of what you must pay to get the meal, so it is generally taxed as the meal is. On a BC bill that means 5% on the service charge attached to food.

Third-party delivery muddies the picture only because there are more parties. The restaurant's food keeps its treatment. The platform's delivery fee and service fee are the platform's own supplies, taxed on their own terms, which is why the tax on an app order does not reconcile to 5% of the food. For the restaurant's own books the important thing is that the platform's statements be reconciled line by line — food revenue, platform commission, taxes collected on each — which is exactly the reconciliation our bookkeeping work does weekly for delivery-heavy kitchens.

BC treats them the same: food is food, and the provincial exemption covers both the grocery cart and the restaurant table. The federal GST does not. Basic groceries are zero-rated — taxed at 0% — while prepared food and restaurant meals carry the full 5%. That federal line, not anything provincial, is why your grocery receipt shows no tax on the chicken while the restaurant's roast chicken shows 5%.

The federal boundary runs on preparation and immediacy, and it produces the classic edge cases: a dozen donuts is zero-rated groceries while one donut with a coffee is a taxable snack; a frozen lasagna is groceries while the same lasagna heated is a meal; a whole cake is groceries while a slice is not. Bakeries, delis and grocery stores with hot counters live on this line every day, and their tills need the boundary programmed item by item.

The practical rule of thumb holds up well: if it is ready to eat now, the GST likely applies; if it is destined for your kitchen first, it likely does not. The restaurant context removes all doubt — a restaurant meal is the definitional taxable prepared food.

For owners who sell across the line — a café with packaged beans, a restaurant with a retail sauce shelf — each product needs its own classification, because the store's overall character does not decide the tax; the item does.

The interprovincial comparison is where BC's treatment stands out. In Ontario, a restaurant meal carries 13% HST — the 5% federal part plus an 8% provincial part — with one deliberate exception: qualifying prepared food and beverages sold for a total of $4.00 or less get a point-of-sale rebate of the provincial 8%, leaving just 5%. That is why a small coffee order in Ontario is taxed like BC and a dinner is not.

Alberta has no provincial sales tax of any kind, so a restaurant meal there carries the same 5% GST as in BC — two provinces arriving at the same bill from opposite philosophies.

The mobile-food economy makes this practical rather than trivia. A food truck that works both sides of a provincial border, a caterer taking a job in another province, a franchise with locations in three — each collects the tax of the province where the supply is made, and the till configuration that is right at home is wrong on the road. Multi-province operators usually end up registered and filing in more than one system, which is the bread and butter of our GST/HST and PST filing plans.

Two dates are worth knowing so that older articles — and older memories — do not mislead.

The federal GST/HST holiday that removed tax from restaurant meals nationwide was temporary, and it ended at the close of February 15, 2025. From December 14, 2024 to that date, restaurant food and most non-alcoholic drinks (and some lower-alcohol drinks) carried no GST/HST at all. Anyone remembering a stretch of untaxed restaurant bills is remembering correctly — and it is over. BC restaurant food went back to 5% on February 16, 2025.

The next change is provincial and next door: Manitoba eliminates its PST on the remaining taxable food and beverage items sold in grocery and convenience stores — prepared foods, snack items, most beverages — effective July 1, 2026, with alcohol over 1% and non-food items staying taxable. That change is about grocery-store prepared food, not a restaurant-meal exemption, but it narrows the gap between the grab-and-go counter and the restaurant table in that province, and BC operators near the border will hear about it from customers.

Nothing announced changes BC's own treatment: food exempt, liquor at 10%, soda at 7%. This page states the position as at August 2026; sales tax is the fastest-moving part of the Canadian system, so check the date on anything you read about it — including this.

Everything above is the guest's view. The owner's obligations start earlier, with registration — and a restaurant crosses the thresholds faster than almost any other small business, because food revenue is high-frequency from the first week.

Federally, GST registration stops being optional once taxable revenue passes $30,000 over four consecutive calendar quarters — and a single quarter that exceeds $30,000 on its own ends small-supplier status immediately, with tax to charge from that point rather than from month-end. A modestly busy restaurant can cross the single-quarter line in its opening weeks, which is why waiting to see how the year goes is the wrong instinct here. Most new restaurants should simply register before the doors open; it also unlocks input tax credits on the build-out, which is usually the largest GST the business will ever pay.

Provincially, a BC restaurant that sells liquor or soda needs PST registration to collect the 10% and 7% — the food exemption does not exempt the business from the PST system if anything taxable crosses the counter.

Registration timing, the choice of filing frequency, and whether the quick-method style simplifications fit a food business are decisions best made once, at the start — they are the first conversation in our restaurant accounting work, and a GST registration and filing setup is a fixed-fee engagement.

A restaurant till in BC has to hold four treatments at once: 5%-only on food and exempt beverages, 15% combined on liquor, 12% combined on soda, and the correct handling of service charges and comps. The errors are rarely conceptual — they are configuration, made once at setup and repeated on every transaction after.

The audit-proof approach is boringly specific. Map every menu item to a tax category the day it is added, not in bulk later. Test one bill from each category monthly against a calculator — one plate, one beer, one cola, one coffee — and file the four receipts. When the menu changes seasonally, the new items get mapped before service, because "the specials were taxed like the mains" is the exact shape of error that runs for a whole season.

Comps, staff meals and promotional discounts each have their own treatment, and they are where good intentions create bad records: a 100% discount and a void are different events to the tax system even when the guest experience is identical.

None of this needs an accountant on staff. It needs the till configured correctly once, a monthly five-minute check, and a bookkeeper who reconciles POS totals to deposits to filings — the triangle that makes an audit a document request instead of an excavation.

The same discipline pays on the cost side. A kitchen's deductible expenses — supplier invoices, equipment, the renovation, the delivery platform's commissions — flow straight from the records the sales-tax setup already keeps, and the categories that matter for a food business are covered in our guide to small business tax write-offs. And once staff move from casual to scheduled, payroll brings its own remittance calendar — source deductions run on stricter deadlines than sales tax, and the two are easiest to run as one monthly rhythm rather than two scrambles.

Collecting the tax is half the job; the other half is remitting it and claiming what the business is owed back.

The GST a restaurant collects is netted against the GST it paid on its own inputs — rent, equipment, food purchases from suppliers who charged it, the renovation — through input tax credits. For a new restaurant the ITCs on the build-out commonly exceed the GST collected in the early months, producing refunds rather than payments; a business that delays registration forfeits the cleanest version of that recovery. The credits are only as good as the invoices behind them, so supplier invoices need capturing at payment time, not reconstructed at filing time.

PST works differently, and the difference bites: PST collected on liquor and soda is remitted to the province, but PST a restaurant pays on its own purchases is generally a cost, not a creditable input. Mixing the two systems — netting PST as though it were GST — is a classic error in owner-kept books.

Filing frequency follows revenue, and each return has to reconcile three ways: POS tax collected, bank deposits, amounts filed. When those three disagree, the discrepancy compounds monthly, and it is far cheaper to catch at month two than at year three. That reconciliation is ordinary monthly work — the same loop our sales tax return filing and bookkeeping engagements run for restaurants across the province, entirely remotely, including from our Vancouver practice.

Guests arrive at this page from a receipt that looked wrong; owners arrive from a POS setup screen or a first PST letter. Both are answerable quickly, because BC's rules are genuinely simple once the three rates are separated — it is the mixing that confuses.

If the till has been wrong for a while, that is recoverable — corrected returns, a going-forward mapping and a clean reconciliation are ordinary work, and cheaper the earlier they start. Our tax accountant led team sets up and files GST and PST for restaurants remotely across Canada, on a fixed fee agreed before anything begins. Tell us what you sell and we will tell you exactly what to charge on each line, in a free 15-minute consultation, or call +1 (416) 619-0068.