Restaurant owners work long hours on thin margins. Every dollar of tax savings matters. But many restaurant owners leave deductions on the table simply because they do not know they can claim them or they do not keep the right records.

Here are the deductions we see missed most often.

1. Food waste and spoilage

When inventory spoils or is thrown out, that cost is deductible. But you need to track it. Keep a log of wasted inventory with dates, items, and approximate cost. Without documentation, CRA may question your cost of goods sold if it seems high relative to revenue.

2. Staff meals

Meals provided to employees during shifts are a business expense. Unlike client entertainment (which is 50% deductible), staff meals are 100% deductible as long as they are provided to all employees on a consistent basis and are reasonable in value.

3. Uniforms and laundry

If you provide uniforms, aprons, or branded clothing to staff, the cost is deductible. Laundry and dry cleaning costs for those items are also deductible. If employees buy their own required uniforms, the reimbursement is deductible to you.

4. Delivery app commissions

Commissions paid to Uber Eats, DoorDash, SkipTheDishes, and similar platforms are a deductible business expense. These can add up to 20-30% of delivery revenue, so make sure they are captured properly in your books.

5. Licence and permit fees

Liquor licences (AGCO fees), food handler certifications, health inspection fees, music licensing (SOCAN/Re:Sound), and business licences are all deductible. Keep copies of the receipts.

6. Equipment repairs vs. capital purchases

Repairing a piece of equipment (fixing an oven, replacing a compressor) is a fully deductible expense in the year you pay it. Buying new equipment is a capital expenditure that must be depreciated over time using CCA (Capital Cost Allowance). The distinction matters because a repair gives you the full deduction now, while a capital purchase spreads it over several years. If a repair versus replacement decision is close, document why the work was a repair.

7. Interest on business loans

Interest on loans used for business purposes (equipment financing, renovation loans, lines of credit for working capital) is deductible. This includes interest on credit cards used for business purchases, as long as you can separate the business charges.

8. Accounting and professional fees

Fees paid to your accountant, bookkeeper, lawyer, or HR consultant are deductible. This includes tax preparation, bookkeeping, payroll processing, and legal advice related to the business.

9. Insurance

Business insurance premiums (general liability, property, equipment, business interruption, workers’ compensation) are deductible. If you have a commercial auto policy for delivery vehicles, that is deductible too.

10. Marketing and advertising

Costs for your website, social media advertising, flyers, menu printing, signage, Google Ads, and online listing fees (Yelp, Google Business Profile) are all deductible. Many restaurant owners pay for these but do not capture them as business expenses.

The record-keeping habit that saves you money

The common thread across all of these deductions is documentation. CRA does not deny deductions because they are not allowed. They deny them because you cannot prove them. Get into the habit of:

  • Keeping every receipt (digital scans are accepted)
  • Using a separate business bank account and credit card
  • Recording cash transactions daily
  • Reconciling your books monthly, not just at year-end

L&R Accounting works with restaurant owners across Ontario on bookkeeping, tax planning, and CRA compliance. If you think you might be missing deductions, bring us your last two years of returns and we will take a look.

Geetha Srinivasan, CPA (Ontario), CPA (US)
L&R Accounting Services Ltd.