Accountant for Restaurants, Delis and Cafes

Sales tax at 8.875%

Most food and drinks a restaurant sells are taxable in New York City at the combined 8.875% rate. Delis and markets are mixed: sandwiches and hot food are taxable, while many grocery items sold to go are not. Your register has to be set up to tell the difference. We file your New York State sales tax returns, which include the city portion, and reconcile them to your POS reports and bank deposits.

Tips: reporting, the 8% rule and the FICA tip credit

• Tip reporting: employees report their tips to you, and those tips go through payroll for income tax, Social Security and Medicare.
• Form 8027: if you usually have more than 10 employees on a typical day and tipping is customary, you file Form 8027 each year. If reported tips are below 8% of sales, the shortfall gets allocated to tipped staff on their W-2s.
• FICA tip credit: the employer's share of Social Security and Medicare paid on tips can come back as a federal income tax credit on Form 8846. Many small restaurants never claim it.
• No tax on tips for your staff: for 2026, tipped employees may deduct up to $25,000 of qualified tips on their federal return, with the deduction reduced over $150,000 of modified AGI ($300,000 joint). Their W-2s now need the tip amount in box 12 code TP and an occupation code, so your payroll has to be set up for it.

Payroll, food cost and cash

We run payroll at $275 a month including your first employee and $15 for each additional one, with federal and New York returns filed on time. Monthly books show food and liquor cost as a share of sales, so you can catch waste, theft or a supplier price jump in weeks instead of at year end. Cash sales get recorded daily against the register Z report. Unrecorded cash is one of the first things an auditor checks, and one of the hardest to explain later.