Six key tax deductions every restaurant owner needs to know

1. Depreciation of assets
One of the most significant deductions you can claim back is the depreciation of assets such as kitchen equipment, furniture and even the building itself – if you own it.

ATO allows you to write off the cost of these assets over time, which can result in substantial savings.

Instant Asset write off less than $20,000 for each item ,will be available for deduction 25/26 Financial Year ( Yet to be legislated)

2. Staff wages and benefits
Salaries, wages, and benefits for your employees are fully tax deductible. This includes not just hourly wages and salaries but also any bonuses, commissions or tips that you pay to your staff. However, it’s crucial to maintain meticulous records to substantiate these claims in future.

3. Rent, utilities and maintenance
The costs incurred for renting your restaurant space and the utilities that keep it running are also deductible, including electricity, water, and gas bills.

If you run your restaurant from a property you own, you can still deduct expenses related to mortgage interest, property taxes, and maintenance.

Regular upkeep of your restaurant, including minor repairs and maintenance, is also deductible. However, significant improvements or renovations are considered capital expenses and must be depreciated over time.

4. Marketing and advertising
Effective marketing is essential for attracting customers, and fortunately, it’s also tax-deductible.

Whether it’s social media advertising, print media or even the cost of designing your restaurant’s website, all marketing and advertising costs are tax deductible.

5. Office supplies and software
Don’t overlook the smaller items like stationery, computer software, or even your point-of-sale (POS) system. These are considered ordinary and necessary business expenses, making them eligible for tax deductions.

6. Business insurance
Various types of business insurance, such as liability and property insurance, are also deductible. These insurances are essential for safeguarding your restaurant against unforeseen circumstances, and their costs can be written off.

Seek expert financial advice on tax deductions for restaurants
Understanding the above tax deductions can significantly reduce your tax liability and improve your restaurant’s profitability. However, tax laws are complex and ever-changing.

Seeking expert tax advice can give you an advantage in the hospitality industry and ensure that your restaurant’s finances are optimised for growth and profit.

Need advice on how to save your restaurant money with tax deductions? Contact  www.northcityaccountants.com.au