How to Run a Café or Restaurant Business in Australia. Accounting, Compliance & Trinity’s Expert Support
Starting a Cafe or Restaurant: First Steps
Running a cafe or restaurant in Australia is rewarding but demanding. Between managing staff, stock, service, and operations, there is little room for error when it comes to your finances. Getting the right structure, registrations, and compliance in place from the start is what sets successful hospitality businesses apart.
At Trinity Accounting Practice, we support cafe and restaurant owners across Australia with setup, bookkeeping, payroll, BAS, tax, and growth strategy.
Choose the Right Business Structure
Your structure affects your tax rate, personal liability, and ability to grow:
- Sole trader: Simple to set up and low-cost, but carries unlimited personal liability for business debts
- Partnership: Suited for family-run or joint venture operations where two or more parties share ownership
- Company: Provides limited liability, a flat tax rate of 25% for base rate entities, and a professional structure for branding, leasing, and growth
- Trust: Used for tax planning, flexible income distribution, and asset protection
Our business advisory team will assess your goals and recommend the most suitable structure. As registered ASIC agents, we handle company and trust formations on your behalf.
Get the Right Registrations
To operate a food business legally in Australia, you will need:
- An Australian Business Number (ABN) and Tax File Number (TFN)
- GST registration if your annual turnover exceeds or is expected to exceed $75,000
- Food business registration with your local council
- A liquor licence if you intend to serve alcohol (application processes vary by state)
- Music licences through OneMusic Australia if you play music in your venue
Understanding Hospitality Regulations
The hospitality industry is subject to a range of regulatory requirements that affect how you operate, employ staff, and serve customers. Key areas include:
- Food safety regulations covering storage, handling, preparation, and hygiene standards
- A Food Safety Supervisor certificate and a documented food safety plan
- Compliance with the Hospitality Industry (General) Award for all employee wages and conditions
- Council and health department inspections of your premises
- Superannuation and payroll tax obligations for all eligible employees
We help ensure your business registrations, licences, and employment practices are aligned and compliant.
Tax-Deductible Expenses for Cafes and Restaurants
Hospitality businesses incur a wide range of expenses, many of which are tax-deductible. Keeping accurate records throughout the year is essential for maximising your deductions and maintaining compliance.
Staff Costs
- Wages, salaries, and casual payments
- Superannuation contributions (11.5% for 2024-25)
- Payroll tax (applicable in New South Wales once total wages exceed the state threshold)
- Staff uniforms, training courses, and food safety certifications
Stock and Ingredients
- Food and beverage stock including coffee, tea, dairy, meat, produce, and alcohol
- Condiments, sauces, and cooking supplies
- Packaging, takeaway containers, and disposable items
Equipment and Furniture
- Coffee machines, grinders, ovens, and commercial cooking equipment
- Refrigeration, freezers, and display cabinets
- Point-of-sale (POS) systems and tablet devices
- Tables, chairs, booths, and signage
- Kitchen fit-out and renovation costs
Individual items costing less than $20,000 can be claimed immediately under the instant asset write-off for the 2024-25 financial year. Larger items and fit-out costs are depreciated over their effective life. We set up and maintain depreciation schedules to ensure you claim the maximum deduction each year.
Cleaning and Waste
- Commercial cleaning services
- Pest control
- Rubbish removal and grease trap servicing
Marketing and Branding
- Menu design, printing, and signage
- Website hosting and social media advertising
- Listing fees and commissions on food delivery platforms
Software and Technology
- POS systems such as Square, Lightspeed, or Kounta
- Rostering and timesheet software such as Deputy or Tanda
- Accounting software (we recommend Xero for hospitality businesses)
- Booking, delivery, and online ordering integrations
Rent, Utilities, and Insurance
- Commercial rent and lease payments
- Water, gas, and electricity
- Public liability, contents, and equipment insurance
We help you track, record, and claim all legitimate business expenses through your Xero account.
Payroll and Award Compliance in Hospitality
Employment in the hospitality industry is governed by specific award rates and conditions. Getting payroll wrong can result in significant back-payment liabilities and penalties. Key obligations include:
- Award compliance: Employees must be paid in accordance with the Hospitality Industry (General) Award, including minimum hourly rates, casual loading, and classification levels
- Penalty rates: Weekend, public holiday, evening, and early morning shifts attract penalty rates that must be calculated and paid correctly
- Single Touch Payroll (STP): All payroll information must be reported in real time through STP-enabled software
- Superannuation: Employer super guarantee contributions of 11.5% (for 2024-25) must be paid quarterly for all eligible employees
- Leave and records: Accurate records of hours worked, leave accruals, and entitlements must be maintained for all employees
We build award-compliant payroll systems using Xero integrated with rostering tools, making it easy to manage pay runs, leave, and reporting.
Managing Cash Flow in Hospitality
Cash flow management is critical in an industry with daily transactions, perishable stock, and variable labour costs. Effective strategies include:
- Using your POS system to monitor daily and weekly sales trends
- Reviewing food cost percentages and waste levels weekly
- Keeping total wage costs within 30 to 35 percent of revenue as a benchmark
- Monitoring supplier pricing and renegotiating terms regularly
- Using Xero for real-time visibility over income, expenses, and cash position
For businesses that need deeper financial oversight, our Virtual CFO division, VCFO Australia, provides monthly reporting, budgeting, and cash flow forecasting tailored to hospitality businesses.
BAS, GST, and Tax
BAS Requirements
If you are registered for GST, you must lodge BAS quarterly (or monthly for higher-turnover businesses). BAS includes GST collected on food, beverages, and services, GST credits claimed on business purchases, and PAYG withholding and instalment amounts.
GST and Food in Hospitality
Most items sold in a cafe or restaurant are subject to GST, including prepared meals, hot drinks, and eat-in food. However, some basic food items sold as takeaway may be GST-free. Getting the classification right is important for accurate BAS reporting and pricing.
Income Tax by Structure
- Sole traders: Declare business income on your personal tax return, taxed at individual marginal rates
- Companies: Pay a flat rate of 25% for base rate entities (aggregated turnover under $50 million)
- Trusts: Distribute income to beneficiaries who are then taxed at their individual rates
Other Tax Considerations
- Fringe Benefits Tax (FBT): Staff meals, entertainment, and other non-cash benefits may trigger FBT obligations. The rules around employee meals in hospitality are specific and require careful management.
- Instant asset write-off: Eligible equipment purchases under $20,000 can be claimed immediately
- Depreciation: Larger assets are depreciated over their effective life using either the simplified or general depreciation rules
Our accounting and taxation team manages BAS lodgement, tax returns, depreciation schedules, and all correspondence on your behalf.
Tips for Growing a Cafe or Restaurant
Successful hospitality operators share several common practices:
- Monitoring cost of goods sold (COGS) regularly and minimising waste through better ordering and stock rotation
- Streamlining the menu to focus on high-margin items that are efficient to prepare
- Implementing loyalty programs, gift cards, and email-based promotions to drive repeat visits
- Investing in service training to maintain high review scores and customer satisfaction
- Considering additional locations or franchising once the first site is consistently profitable
- Reviewing all contracts annually, including supplier agreements, lease terms, and delivery platform commissions
If you need finance for a fit-out, equipment upgrade, or expansion to a second location, our brokerage division, Nexus Wealth Partners, can assist with commercial property loans, equipment finance, and business lending.
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How Trinity Accounting Practice Supports Cafes and Restaurants
We have been supporting hospitality businesses since 2003. Our services cover every aspect of running the financial side of your operation:
- Bookkeeping and reporting: Xero integration with your POS system, monthly reconciliation, and profit and loss, cash flow, and KPI reporting
- Payroll setup and management: Award-compliant pay runs, superannuation lodgement, STP reporting, staff onboarding, and leave tracking
- BAS and tax returns: Quarterly BAS preparation and lodgement, annual tax returns, and depreciation and asset write-off calculations
- Budgeting and strategic advice: Menu and pricing strategy, budget forecasting, cash flow planning, and lease and expansion reviews
As certified Xero advisors, we connect your hospitality software with your accounting system for seamless, real-time financial reporting.
Book a consultation with our team to discuss how we can support your cafe or restaurant business.
Trinity Accounting Practice
Accounting Firm in Beverly Hills, Sydney
Phone: 02 9543 6804
Address: 159 Stoney Creek Road, Beverly Hills NSW 2209
Website: www.trinitygroup.com.au
Weekend and after-hours appointments available
Our Virtual CFO division, VCFO Australia, provides strategic financial management, budgeting, forecasting, and compliance support for growing businesses and not-for-profits.
Learn more about what we offer
Discover the industries we specialise in
Read more tax and accounting tips on our blog
Our mortgage brokerage division, Nexus Wealth Partners Pty Ltd, assists clients with home loans, refinancing, and business finance.
Disclaimer: Information provided on this website is intended as a general overview only and does not replace professional advice tailored to your personal circumstances.
