Canada pricing mistakes usually come from workflow, not from arithmetic. Teams know the rates, but margin leaks still happen when pre-tax costing, province tax, and cash rounding are blended in the wrong order.
This guide gives you a clean sequence that works in daily operations.
Quick Takeaways
- Set target menu prices on pre-tax numbers first.
- Apply GST/HST by province only after margin is locked.
- Round only final cash totals to the nearest 5 cents.
- Run one monthly review for province tax setup, POS mapping, and top-SKU margin drift.
Why Province Math Breaks in the Field
In multi-location operations, finance may report pre-tax performance while front-of-house teams focus on tax-inclusive receipt totals. If these views are not reconciled, one menu can look healthy in a dashboard but weak in real checkout behavior.
The fix is simple: one shared pricing order for everyone.
GST/HST Snapshot (Current Structure)
CRA guidance currently reflects:
- 13% HST in Ontario
- 14% HST in Nova Scotia (on or after 2025-04-01)
- 15% HST in New Brunswick, Newfoundland and Labrador, and Prince Edward Island
- 5% GST in provinces and territories without HST (with PST/QST handled separately where applicable)
Build this directly into your pricing sheet and POS tax mapping.
Core Formula (Pre-Tax First)
Pre-tax target price = Food cost per serving / Target food cost ratio
Tax-inclusive checkout = Pre-tax price x (1 + GST/HST rate)Cash handling rule:
Final cash total = Tax-inclusive checkout rounded to nearest 0.05Worked Example (CAD)
Assumptions:
- Food cost per serving: C$6.40
- Target food cost ratio: 32%
Step 1: pre-tax target
6.40 / 0.32 = C$20.00Step 2: province checkout comparison
| Province | Tax setup | Card total | Cash total |
|---|---|---|---|
| Ontario | 13% HST | C$22.60 | C$22.60 |
| Nova Scotia | 14% HST | C$22.80 | C$22.80 |
| Alberta | 5% GST | C$21.00 | C$21.00 |
Your food cost percentage remains anchored to C$20.00 pre-tax. What changes is guest-facing checkout by province.
Local Operating Scenarios
Toronto downtown office-lunch shop
Lunch peaks are short and price sensitivity is high on bundled offers. Keep anchor SKUs stable, and recover margin with add-ons where elasticity is stronger.
Edmonton suburban family dinner location
Average basket size is broader, and cash usage can spike on community event days. Test final-total rounding behavior in POS before weekend service to avoid register friction.
CPI Checkpoint for Review Cadence
Use Statistics Canada CPI data (table 18-10-0004-01, food purchased from restaurants) as your monthly review trigger. When restaurant inflation accelerates versus your current ladder, run a targeted reprice before drift accumulates.
20-Minute Monthly GST/HST Review
- Recalculate pre-tax targets for top sellers.
- Verify province tax mappings in POS and third-party ordering channels.
- Simulate card and cash totals for the top 20 SKUs.
- Check that menu endings still match your intended positioning.
- Publish one effective date across printed, digital, and delivery menus.
Related Guides
- Canada Menu Pricing Guide
- Canada Menu Pricing Calculator
- Canada Menu Price Rounding Guide
- Canada Food Cost Calculator
- Canada Tips vs Service Charges Guide
Want This Done Automatically?
KitchenCost recalculates recipe costs, food cost %, and target prices as ingredient and channel costs move, so province checkout totals stay aligned with your margin goals.
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