Rounding looks like a cosmetic decision until it starts distorting your weekly margin checks. In Australia, the order matters: set your ex-GST margin first, publish GST-inclusive menu prices, and handle cash rounding only at the final total.
This guide is built for operators who need clean math that still works at the counter during busy service.
Quick Takeaways
- Build targets on ex-GST numbers, not on receipt totals.
- Customer-facing menu prices should be GST-inclusive.
- Apply nearest-5-cent rounding to final cash totals only.
- Run one monthly review so POS, in-store menu boards, and delivery channels stay aligned.
Why Rounding Creates Hidden Margin Drift
Most teams already know their target food cost percentage. What usually fails is execution order.
If staff round item prices before GST, then apply ad-hoc rounding again at checkout, the monthly P&L will not reconcile cleanly with item-level costing. That mismatch grows fastest on high-volume SKUs like coffee, wraps, and lunch combos.
Rule Snapshot You Need to Lock
- ACCC pricing guidance requires displayed total prices for consumers to include GST.
- ATO GST guidance confirms GST is generally 10%.
- For cash transactions, Australian consumer guidance commonly applies nearest-5-cent rounding to the final amount.
Treat these as system rules, not optional team preferences.
Core Formula (Ex-GST First)
Ex-GST target price = Food cost per serving / Target food cost ratio
GST-inclusive menu price = Ex-GST target price x 1.10After this, select the closest approved price ladder point (.50, .90, .95, etc.) that still protects your target.
Worked Example (AUD)
Assumptions:
- Food cost per serving: A$4.80
- Target food cost ratio: 30%
Step 1: solve ex-GST target
4.80 / 0.30 = A$16.00Step 2: convert to displayed menu price
16.00 x 1.10 = A$17.60Operational decision:
- Value-led ladder: A$17.50
- Margin-protect ladder: A$17.90
If your item is labor-heavy and peak-time constrained, A$17.90 is usually the safer choice.
Local Operating Scenarios
Melbourne CBD weekday cafe (card-heavy)
Card share is high, so cash rounding has limited impact. Your main risk is underpricing fast movers during short lunch windows. Lock ladder consistency first, then review bundle pricing for add-on lift.
Regional Queensland takeaway with weekend cash spikes
Cash share increases during local events and family peaks. The key is POS readiness: test final-total rounding rules before service so staff quote totals consistently without hesitation.
20-Minute Monthly Rounding Review
- Recalculate ex-GST targets for top 15 SKUs.
- Reapply GST and compare against your approved ladder.
- Simulate final totals for card and cash.
- Check in-store board, QR menu, and delivery menus for mismatch.
- Publish one effective date across all channels.
Related Guides
- Australia Menu Pricing Guide
- Australia Menu Pricing Calculator
- Australia Food Cost Calculator
- Australia Delivery App Pricing Guide
- Australia Restaurant Labour Cost Calculator
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