Hospitality is a business of small percentages. A venue turning over $1.5 million that lets wages drift three points and food cost two points has lost $75,000 of profit without anyone noticing a single bad day. Add penalty rates that change by the hour, a POS full of data nobody reads, cash in the till, card tips, and a mix of GST-free and taxable menu items, and you can see why so many busy venues struggle to show a profit.
We work with cafes, restaurants, bars, pubs, hotels, takeaways and caterers, from a single owner-operated coffee shop to groups with several venues. Here is what we focus on.
Hospitality accounting at a glance (2026–27)
| Item | Position | Source |
|---|---|---|
| Award minimum wages | Up 4.75% from the first full pay period on or after 1 July 2026 | Fair Work Commission Annual Wage Review 2026 |
| National minimum wage | $26.44 an hour, $1,004.90 a week (from 1 July 2026) | Fair Work Commission |
| Super guarantee | 12% of qualifying earnings, paid with every pay run (Payday Super, from 1 July 2026) | ATO |
| Intentional underpayment | A criminal offence since 1 January 2025 | Fair Work Ombudsman |
| Payroll tax threshold | NSW $1.2 million, Victoria $1 million, Queensland $1.3 million of group wages (2026–27) | State revenue offices |
| Instant asset write-off | Assets under $20,000 each, turnover under $10 million (2026–27) | ATO |
| ATO hospitality benchmarks | Latest published figures are for 2023–24 | ATO small business benchmarks |
What does hospitality bookkeeping involve?
Hospitality bookkeeping is the daily work of turning POS, bank, payroll and supplier data into accurate books: sales posted by category and payment type, card and delivery payouts matched to the bank, cash counted against the Z-report, bills coded to food, beverage or overheads, and staff paid under the right award. Done daily, it gives you a wage and food cost percentage you can act on next week rather than next quarter.
| When | Bookkeeping task | Why it matters |
|---|---|---|
| Daily | POS summary posted to Xero by category (food, beverage, alcohol, GST-free), card settlements, tips and cash matched | Sales and GST are right at the source |
| Daily | Supplier invoices captured from your phone and coded to food, beverage, packaging or overheads | Food and beverage cost % you can trust |
| Weekly | Payroll checked against the award, penalty rates and junior rates; super paid with each pay run | Payday Super and underpayment risk |
| Weekly | Prime cost report: food, beverage and wages as a % of sales | The one number that tells you if the week worked |
| Monthly | Delivery app statements reconciled (commission, GST on commission, refunds) | Sales are often recorded net of commission, which understates both revenue and costs |
| Monthly | Management report: profit by venue, cash position, debts due | Decisions on rosters, menu prices and orders |
| Quarterly | BAS reviewed before lodgement, PAYG withholding reconciled | No surprise GST bills |
| Yearly | Single Touch Payroll finalised, tax return, structure review | Clean year end, planned tax |
A good hospitality bookkeeper does most of this; an accountant adds the award checks, tax planning and structure work. If all you need is the bookkeeping, our Xero bookkeeping service covers it on its own.
Why is a packed venue still making so little money?
- Wages set by the roster, not the forecast. Rosters are written from habit. A quiet Tuesday gets the same floor staff as a busy Friday.
- Food cost nobody measures. Supplier prices rise, portions creep, wastage isn't recorded, and menu prices stay where they were two years ago.
- Sales data that never reaches the accounts. The POS knows exactly what sold, when and at what margin. Xero gets one lump of "sales" a week.
- Award risk. Different awards, classifications, junior rates, split shifts and penalty rates mean small payroll errors add up quickly over a year.
- Cash and card fees. Card surcharges, merchant fees, delivery app commissions and cash handling all sit between your menu price and your bank account.
What does a hospitality accountant do for your venue?
- POS to Xero. A daily summary posts sales by category, payment type, tips and GST. Card settlements and delivery app payouts are matched to the bank.
- Weekly prime cost. Food and beverage cost plus wages, as a percentage of sales, every week rather than every quarter.
- Payroll and award compliance. Correct award and classification for each person, penalty rates, junior rates, allowances, and Payday Super, which from 1 July 2026 means super paid with every pay run. See our payroll and Payday Super service.
- BAS that reflects your menu. GST on taxable and GST-free items coded correctly at the POS, not fixed at quarter end.
- Cash flow forecasting around seasonal dips, rent reviews and equipment replacement.
- Tax planning and structure for owners, partners and multi-venue groups.
Which numbers should a hospitality business watch?
The ATO publishes benchmark ranges from small business tax returns. These are the 2023–24 figures for restaurants (ATO restaurant benchmarks) and coffee shops (ATO coffee shop benchmarks), as a share of turnover:
| Benchmark (2023–24) | Restaurants, $500k–$2m turnover | Restaurants, over $2m | Coffee shops, over $600k |
|---|---|---|---|
| Cost of sales | 32% to 38% | 31% to 36% | 33% to 38% |
| Labour | 23% to 32% | 27% to 34% | 27% to 35% |
| Rent | 8% to 12% | 6% to 9% | 6% to 10% |
| Total expenses | 84% to 93% | 88% to 94% | 86% to 93% |
Benchmarks have two uses. They show you where you sit against similar businesses. And the ATO uses them to identify businesses whose reported figures look out of line, which in a cash-handling industry can lead to questions about unrecorded sales.
The KPIs we report each week or month:
| KPI | What it tells you |
|---|---|
| Prime cost % (food, beverage and wages ÷ sales) | The single best measure of whether a venue is under control |
| Wages % by day and by shift | Where the roster doesn't match trade |
| Food cost % and beverage cost % | Supplier, portion, wastage or pricing problems |
| Average spend per head and covers | Whether growth is coming from volume or value |
| Sales per labour hour | Productivity, comparable across venues |
| Net margin after owner's market wage | Whether the business pays you as well as a job would |
Example: what 3% of wages is worth
Say a restaurant turns over $1,200,000 a year and runs wages at 35% ($420,000). Rostering one fewer floor staff member on the four quietest lunch services, and closing 30 minutes earlier on two weeknights, brings wages to 32%. That is $36,000 a year back in profit, with no change to the menu or prices. The weekly wages report is what makes the change visible enough to act on.
What tax and compliance issues are specific to hospitality?
Awards and penalty rates
Most venues have staff covered by the Hospitality Industry (General) Award, the Restaurant Industry Award, the Fast Food Industry Award or the Registered and Licensed Clubs Award, and some businesses straddle two. Each sets classifications, junior percentages, casual loadings, penalty rates and break rules (Fair Work Hospitality Award summary). Since 1 January 2025, intentionally underpaying employees is a criminal offence (Fair Work Ombudsman). If you pay flat or annualised rates, you need regular reconciliations against what the award would have paid. Our award compliance check does this properly.
Tips and surcharges
Tips paid in cash directly to staff are the staff member's own income. Card tips are different, because they pass through your merchant account, so you need a clear and documented process for how they're recorded and passed on. How you set that up affects your sales figures, payroll records and super calculations, so we design it with you rather than leave it to the POS default. Card surcharges you add to a bill are part of the price and are included in your sales and GST.
GST on food and drinks
Meals eaten on the premises, hot food and alcohol are taxable. Some cold or packaged items sold as takeaway, such as basic food, can be GST-free. The POS needs each item set up correctly, because a GST-free item coded as taxable costs you 10% of its price, and the reverse means underpaid GST. We review your item settings when we onboard you.
Cash and record-keeping
Cash takings must be recorded completely. Electronic sales suppression tools, software that deletes or alters POS records, are illegal to make, supply or possess. Simple daily cash-up sheets, matched to banking and the POS Z-report, protect you if the ATO compares your figures with the benchmarks.
Staff meals, visas and payroll tax
- Staff meals eaten on your premises on a working day are generally exempt from FBT. Staff parties and take-home meals need a closer look.
- Visa workers have work limits and pay requirements. Our visa worker employment agent checks the rules for each visa type and your accountant confirms them.
- Payroll tax applies once your group's wages across Australia pass the state threshold (for 2026–27, $1.2 million in NSW, $1 million in Victoria and $1.3 million in Queensland). Multi-venue groups under common ownership are grouped. Our payroll tax guide explains the state rules.
Hotel bookkeeping: what's different for pubs and accommodation?
Hotel bookkeeping adds a second revenue engine to the venue: rooms. Room revenue comes through a property management system and online booking platforms, deposits are held before guests arrive, and pubs often run food, bar, bottle shop, gaming and accommodation under one roof. Each needs its own revenue line and its own margin.
| Area | What we set up | Watch out for |
|---|---|---|
| Room revenue | Property management system summary posted to Xero daily, matched to card and booking platform payouts | Booking platform payouts arrive net of commission, so gross up the sale and record the commission as an expense |
| Deposits and prepayments | Held as a liability until the guest stays | Counting deposits as sales overstates profit and can bring GST forward |
| GST on accommodation | Short stays in a hotel, motel or serviced apartment are taxable supplies of commercial residential premises | Stays of 28 continuous days or more can be input taxed or taxed on half the price under the long-term concession; meals and mini-bar items stay fully taxable (ATO commercial residential premises) |
| Departments | Separate tracking for rooms, food, bar, bottle shop and gaming | Wage cost by department, not one blended figure |
| Gaming | GST is worked out on the net gambling margin, not each bet, and state gaming taxes apply | Keep machine reports, payouts and banking reconciled weekly |
| Wages | Most hotel staff sit under the Hospitality Industry (General) Award, including front office and housekeeping | Split shifts, overtime and public holidays |
Running more than one revenue line? Ask us how we'd split your reporting by department.
What's the right structure for a cafe, restaurant or venue?
| Situation | Common structure | Watch out for |
|---|---|---|
| First venue, one owner | Company, often owned by a family trust | Personal guarantees on the lease and liquor licence obligations |
| Two or more partners | Company with a shareholders' agreement | Who can force a sale, and how a partner exits |
| Several venues | Separate company per venue, possibly under a holding entity | Payroll tax grouping still applies across the group |
| You own the freehold | Property in a separate trust, leased to the operating company at market rent | Keeps the building away from trading creditors |
| Buying an existing venue | New entity buys the business, not the old company | Due diligence on wages, leases and liabilities |
Liquor licences are issued under state laws and are usually tied to the licensee entity and approved managers, so changing structure or selling the business needs to be planned with your licensing adviser. If you're buying a venue, our due diligence service looks at real wage costs, award compliance and lease terms before you sign.
How do we work with hospitality businesses?
- Free strategy call. We look at your current numbers and tell you what we'd change first.
- Setup. We connect your POS, delivery apps, payroll and bank feeds to Xero, map sales categories and GST codes, and set up tracking by venue.
- Daily bookkeeping. Our transaction coding agent suggests codes for each bank line and drafts questions for anything unclear; your bookkeeper reviews and approves them. Supplier invoices are captured from your phone.
- Payroll each week, checked against the award. Our award underpayment agent tests every employee's pay against the award and quantifies any shortfall, and your accountant reviews the result before anything is paid or reported.
- Weekly prime cost report and a monthly management report you can read in five minutes.
- BAS and tax planning, with a structure review as you add venues.
The work runs on Nagaris. AI agents draft; qualified accountants review and sign off, and nothing reaches you, your staff or the ATO without a person approving it.
"We have been with BPAG for almost a year now and have felt significant improvement with the business, our own knowledge and motivation… BPAG are by far the best." Veronica Thomas, Google review
What does it cost?
Most single venues with staff sit on Business Insights from $249 per week + GST, which includes weekly payroll for up to 10 staff, monthly management reports and KPI analysis. Groups that want forecasting and a monthly strategy meeting use Fractional CFO from $499 per week + GST. All plans are on our pricing page.
If you're a small owner-operated cafe with two casuals and a simple menu, a reliable payroll app, a bookkeeper and an annual return may be enough. We'll say so.
What should you send us?
- POS sales reports for the last three months, and admin access to the POS
- Payroll export, rosters, employment contracts and the award each person is paid under
- Xero access or last year's financial statements and tax return
- Delivery app statements (Uber Eats, DoorDash, Menulog or similar)
- Your lease, liquor licence details and any equipment finance
-
Your last four BAS and any ATO correspondence
-
For hotels: property management system reports and booking platform statements
Photos from your phone are fine. No portal passwords.
Frequently asked questions
What's a healthy wage percentage for a cafe or restaurant?
It depends on your model, trading hours and how much the owners work in the business. ATO benchmark data for 2023–24 shows labour at roughly 23% to 32% of turnover for restaurants turning over $500,000 to $2 million. Many operators track 'prime cost', food and wages combined, as the more useful single figure. If owners work unpaid shifts, add a market wage for them before comparing.
Can I pay staff a flat hourly rate instead of penalty rates?
Only if the flat rate covers everything the award would have paid for the hours actually worked, including weekend, public holiday, overtime and late-night penalties. The hospitality and restaurant awards allow annualised wage arrangements, but they come with record-keeping and reconciliation requirements. Without a regular reconciliation, a flat rate is one of the most common sources of underpayment.
Do staff meals attract FBT?
Food and drink provided to employees and eaten on your premises on a working day is generally exempt from FBT. Meals taken home, staff parties and meals for family members are different and can be taxable fringe benefits or entertainment. We check how your staff meal policy works in practice.
Which POS systems do you work with?
We work with the common hospitality POS platforms that connect to Xero, such as Lightspeed, Square, Toast, Impos and others. The aim is a daily sales summary posted to Xero by category (food, beverage, alcohol, GST-free items), with card settlements, tips and cash matched to the bank. We map it once and check it regularly.
Should each venue be a separate company?
Often, yes, because it limits the damage if one venue fails and makes each venue easier to sell. But separate entities don't avoid payroll tax, because related businesses are grouped and share one threshold. Separate entities also mean more returns and more admin, so it's a trade-off we model.
What happens if I find I've underpaid staff?
Fix it promptly, pay the back pay and the super, and keep a record of how you calculated it. Since 1 January 2025, intentional underpayment is a criminal offence, but honest mistakes that are found and fixed are treated very differently. Our award underpayment agent quantifies the back pay and super shortfall and your accountant reviews it; an employment lawyer should advise on anything contentious.
Official sources
General information only, current as at 23 October 2026. It is not personal tax, legal or financial product advice and doesn't take your circumstances into account. Talk to us before you act. Where a recommendation needs a licensed financial adviser or a solicitor, we work alongside them.