Accountants for Cloud Kitchens & Ghost Kitchens

Basic groceries are zero-rated, so no GST or HST is charged on staples such as bread, milk, vegetables, meat and eggs. Tax does apply to restaurant meals, most prepared or heated food, catering, carbonated drinks, candy and snack foods. Provinces that run their own sales tax set separate food exemptions, so an identical item can be treated differently from one province to the next. A business selling both categories has to code its items correctly at the till.

Restaurant meals are taxable. What appears on the bill depends on the province of supply: harmonised provinces charge one combined HST rate, while elsewhere federal GST applies and the provincial sales tax is added or, in some provinces, not applied to prepared food. Alcohol can attract extra provincial charges. Tips left voluntarily are not taxed. Operators should confirm how their own province treats prepared meals before setting menu prices and configuring the point-of-sale system.

Yes. Tips and gratuities are taxable income whether they come in cash, on a card, or through a pooled arrangement. Controlled tips paid out by the employer count as employment income, run through payroll and appear on your T4. Direct tips from customers usually sit on no slip at all, so you report them yourself as other employment income. Keep a daily record, because the CRA can estimate unreported tips from sales and industry patterns.

Rent paid is not deductible on the federal return. Relief comes instead through provincial credits claimed on the provincial form filed with your T1, such as Ontario's energy and property tax credit, Manitoba's renters credit and Quebec's solidarity tax credit, each with its own residency and income tests. Rent is deductible only as a business or employment cost: the work-space-in-the-home share on a T2125, or with an employer-signed form where an employee is required to work from home.

The lowest federal bracket applies to the first band of taxable income. Its upper limit is indexed to inflation each year, while the rate itself changes only when Parliament legislates a change, so check the CRA rate table for the year you are filing. Each province and territory adds its own lowest bracket on top, so the combined rate depends on where you lived on 31 December. The basic personal amount, a non-refundable credit, eliminates federal tax only for someone whose income is at or under that amount.

Yes. All tips are taxable income, whether they arrive as cash, on a card, or through a pooled arrangement. Controlled tips that the employer distributes run through payroll with tax, CPP and EI withheld. Direct tips from customers carry no withholding, so the server has to track and report them; setting aside a share through the year prevents a balance owing at filing. Keep a daily tip log.