Accounting for restaurants and food service – what has to be in place?
Seven things have to hold: the till system and daily settlement, the staff register, the right VAT rate on takeaway versus table service, tips as employment income, gift cards as a liability, platform settlements recorded gross, and documented inventory. The same pizza can carry 15 or 25% VAT depending on whether it is served or taken away – and it is the till set-up that decides whether the accounts get it right.
Cash sales and the daily settlement
Where the customer settles immediately at the point of sale in cash, by card or through a relevant payment solution, the sale normally has to be registered as it happens in a till system meeting the cash register rules. At the end of the day the Z-report and terminal reports are produced. The cash is counted and reconciled against the till, and card and Vipps payments against the reports. Differences should be explained the same day – not at the year-end close. A good daily settlement follows the chain registered sale → means of payment → tips → bank settlement → accounts. The requirements for the system are in Cash sales and cash registers
The staff register
Restaurants, food service and catering are normally covered by the staff register requirement in section 8-5-6 of the Bookkeeping Regulations. The register has to show who is actually working and when the working day begins and ends. There is a limited exception where the staff consists only of the owner or working proprietor and the general manager, plus specified family members. As soon as others work in the business, the duty normally applies broadly. The register has to be kept as you go. One filled in afterwards is not a staff register, and that is one of the most common findings on an inspection – see A labour crime inspection on site for how such inspections work.
15 or 25% VAT?
In 2026 the ordinary VAT rate is 25%, while food carries 15% where the conditions for the reduced rate are met. The practical general rule: takeaway and food normally 15%, a food service 25%, alcohol 25%. The same pizza can therefore carry different VAT depending on whether it is served or taken away. That means the till system has to be able to separate the two at the moment of sale – it cannot be put right afterwards. Shared seating in a shopping centre does not automatically become the restaurant's service area. The specific layout has to be assessed.
Catering
Pure delivery of prepared food can be a sale of food at 15%. Where the supplier also provides serving staff, lays tables, clears up or delivers other substantial service elements, 25% can apply. Settle this in the quotation and in the invoice set-up, not when the invoice is being booked.
Tips
Tips that go to employees are taxable employment income. The employer has to keep track, report them and handle the advance deduction and employer's contributions. In HR-2023-728-A the Supreme Court held that the employers in the Hotel Bristol and Oslo Plaza case could not deduct their own employer's contribution and administration costs from tips belonging to the employees. Voluntary tips are normally not VAT-liable where they can be separated from the consideration for the service. The reporting follows the ordinary payroll routines – see A monthly checklist for the payroll run
Gift cards and platform settlements
A flexible gift card that can be used on goods or services with different VAT treatment is normally treated as a liability until redemption. VAT is then calculated on redemption. A voucher for one specific service with a known VAT treatment can be treated differently. Where the restaurant is itself the seller of the food on Foodora, Wolt or another platform, it is normally wrong to book only the net bank receipt after commission. The settlement should show gross sales, returns and refunds, VAT, the platform fee and the net payment. The reverse charge should only be used where the restaurant actually buys a relevant remotely deliverable service from a foreign supplier – see VAT on services to and from abroad
Inventory and shrinkage
Food, drink and other goods still owned at the year end have to be documented as inventory. A physical count does not necessarily have to happen on 31 December where the business has adequate stock accounting and documents the movements up to the year end. Larger write-offs and shrinkage should be documented as they occur. For tax, goods still owned normally cannot be written down merely because they are obsolete or near their expiry date – see Inventory at the year-end close
Staff meals and entertaining
Free food for employees is not automatically tax-free. Reasonably subsidised food can be a tax-free welfare measure where the conditions are met – see Benefits in kind Client dinners and other entertaining have strict deduction rules, and there is a per-person limit for simple refreshments at an external venue. Check the current rate with Skatteetaten before putting it into the routine. Input VAT on entertaining is in any case not deductible – see VAT deductions
Payroll
Accommodation, food service and catering is one of the industries with generally applicable binding minimum wage rates. From 2026 the tax withholding account is gone: the advance deduction goes directly to Skatteetaten by the first working day after payday, while employer's contributions are still paid every two months – see Employer's national insurance contributions
Common mistakes
Takeaway and table service use the same VAT code. The staff register is filled in afterwards. Tips are mixed with ordinary turnover. Platform settlements are booked net only. Gift cards are booked both on sale and on redemption. Staff meals are taken from stock without documentation. Inventory is estimated rather than documented. Entertaining is booked with an input VAT deduction. Good restaurant accounting starts on the floor, not at the year-end close. Greenleaf can build the routines around the till, the daily settlement, the staff register, VAT codes, tips, gift cards, platform settlements, stock and payroll.
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This is general guidance, not advice on your specific case. Deadlines, rates and amounts change – always check the current rules, or get in touch with us.
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