Restaurants, cafés and takeaways
Accounting for Chicago Restaurants and Cafés
Monthly sales tax, tip reporting and food cost tracking.
Common mistakes in this industry
- Delivery platforms report gross sales including their own fees, so the sales tax base looks larger than the money reaching the bank.
- Cash tips and card tips are treated differently for withholding, and getting the split wrong shows up in a payroll notice months later.
- Comped meals, staff meals and spoilage all move food cost, and none of them appear in the point of sale as a sale.
- A liquor licence, a food handler renewal and an amusement tax registration all sit outside the return schedule and still carry penalties.
Restaurant or café
Frequently asked questions
How much sales tax does a Chicago restaurant charge?
A prepared meal in Chicago carries the state rate, the county and city portions, the transit authority portion, and the city restaurant tax on top. The combined figure moves when any one of those changes. We set the rates inside your point of sale and reconcile what the register collected against what the monthly return reports.
Do I have to report cash tips?
Yes. Employees report tips to you, and you withhold on them and report them with payroll. A larger room also files an annual tip report and allocates tips when reported tips fall short of 8% of gross receipts.
My books are behind and I have a lease renewal coming. How fast is catch-up?
Most restaurants take two to four weeks for a full year of catch-up, faster when the point of sale exports cleanly. Landlords and lenders ask for two years of statements, so we rebuild both and reconcile them before anything goes out.
Should the restaurant be an S corporation?
Sometimes. An S corporation saves self-employment tax once profit is steady and large enough to carry a reasonable salary for the owner. Below that, the payroll and filing cost outweighs the saving. We run the numbers on your last full year before recommending a change.
