The number one tax mistake in small restaurants is not calculation. It is cash handling.
Collected GST/HST is easy to confuse with revenue when service is busy. That confusion gets expensive at filing time.
Quick Summary
- Separate tax cash the same week you collect it.
- Track ITCs continuously, not at quarter end.
- Build one filing-cycle checklist your team can repeat.
- Reconcile by province if your place-of-supply mix changes.
Why this matters now
Statistics Canada (release date: 20 January 2026, Dec 2025 data) showed:
- all-items CPI:
+1.8% - food purchased from restaurants:
+8.5%
That gap means restaurant-facing pressure can stay high even when headline inflation looks moderate. In that environment, remittance timing mistakes hurt more.
Province-rate reality check
CRA’s GST/HST guidance includes:
- GST
5% - HST
13%in Ontario - HST
14%in Nova Scotia (after 1 April 2025) - HST
15%in New Brunswick, Newfoundland and Labrador, and Prince Edward Island
If you deliver across provinces, check place-of-supply before assuming one rate.
Core remittance math
netTaxDue = taxCollected - eligibleITCs
weeklyTaxReserve = expectedNetTaxForCycle / weeksInCycleIf weeksInCycle is 0, return 0 and fix period settings.
Worked example (Ontario quick-service shop)
Assume one monthly cycle view for control purposes:
- taxable sales (pre-tax):
C$62,000 - applicable rate:
13%HST - eligible ITCs tracked for the month:
C$3,950
Step 1: tax collected
taxCollected = 62,000 x 0.13 = C$8,060Step 2: net due
netTaxDue = 8,060 - 3,950 = C$4,110Step 3: weekly reserve target
weeklyTaxReserve = 4,110 / 4.33 = C$949Rounding up to C$975 weekly creates a small safety buffer.
The operator checklist (repeat every cycle)
- Confirm reporting/filer type in CRA account
- Confirm province/place-of-supply mapping in POS
- Export taxable sales and tax collected
- Export ITC-eligible expenses with documentation
- Recompute net tax due
- Transfer weekly reserve into tax bucket
- Reconcile before filing date, not on filing day
Common mistakes
- Pooling GST/HST cash with general operating funds
- Recording ITCs late and guessing eligibility
- Assuming one tax rate for all orders
- Reconciling only after payroll and supplier runs
Bottom line
GST/HST remittance is an operating workflow, not a once-a-quarter project. If you run it weekly, deadline weeks become routine instead of stressful.
Related Guides
- Canada Restaurant Cash Flow and Tax Math (2026)
- Canada GST/HST + Payroll Remittance Calendar (2026)
- Canada Menu Price Review Checklist
KitchenCost helps owner-operators keep tax-aware pricing and reserve math tied to real order data.