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Restaurant bills in Canada can sometimes raise eyebrows with their varied tax lines—GST, PST, or HST—depending on the province. While it might seem complex, the system is manageable once you grasp the essentials. Whether you’re a Canadian understanding different provinces or a visitor exploring our dining scene, this guide will clarify how sales taxes apply to your restaurant experience with straightforward facts.
GST, PST, and HST Explained
First, let’s define the players. Canada has a federal sales tax and various provincial sales taxes, which sometimes combine.
- GST (Goods and Services Tax): This is the federal tax, currently set at 5%. It applies across Canada to most goods and services, including restaurant meals, unless the province participates in the HST system (more on that below).
- PST (Provincial Sales Tax): This tax is levied by certain provincial governments in addition to the federal GST. Provinces like British Columbia, Saskatchewan, and Manitoba have their own PST with varying rates. Quebec has a similar tax called the QST (Quebec Sales Tax). If you’re dining in one of these provinces, you’ll typically see both GST and PST/QST itemized on your bill.
- HST (Harmonized Sales Tax): This is a combined tax that includes both the federal GST portion and a provincial component, administered as a single rate. Provinces like Ontario and the Atlantic provinces (New Brunswick, Nova Scotia, PEI, Newfoundland and Labrador) use the HST system. In these provinces, you’ll see one HST line item on your bill instead of separate GST and PST.
How Do These Taxes Apply to Your Restaurant Meal?
Here’s the general rule: Most prepared food and beverages sold by restaurants are taxable. This applies whether you’re dining in, taking out, or getting delivery. This is different from “basic groceries” you buy at a supermarket (like bread, milk, vegetables), which are often “zero-rated” meaning they have 0% GST/HST. That zero-rating does not extend to restaurant meals or prepared foods.
So, expect to pay sales tax on your appetizers, main courses, desserts, coffee, soft drinks, and alcoholic beverages. The specific rate, however, depends entirely on your location.
Tax Rates Across Canada
This is the most important part for diners in Canada: The total sales tax you pay on a restaurant bill varies by province and territory. Why? Because each province decides whether to charge only the federal GST, add its own PST, or participate in the HST system with a specific provincial rate component.
Here’s a breakdown of the applicable sales taxes on restaurant meals across Canada (Note: Rates are subject to change; these are typical rates as of early 2025. Always check current local rates for absolute certainty):
| Province/Territory | Applicable Tax(es) | Rate(s) | Total Tax Rate | Notes |
|---|---|---|---|---|
| Alberta | GST | 5% | 5% | No Provincial Sales Tax |
| British Columbia (BC) | GST + PST | 5% GST + 7% PST | 12% | PST applies to most food & beverages. |
| Manitoba | GST + PST | 5% GST + 7% PST | 12% | Known as Retail Sales Tax (RST) in Manitoba. |
| New Brunswick | HST | 15% | 15% | Harmonized Sales Tax |
| Newfoundland and Labrador | HST | 15% | 15% | Harmonized Sales Tax |
| Northwest Territories | GST | 5% | 5% | No Territorial Sales Tax |
| Nova Scotia | HST | 15% | 15% | Harmonized Sales Tax |
| Nunavut | GST | 5% | 5% | No Territorial Sales Tax |
| Ontario | HST | 13% | 13% | Harmonized Sales Tax |
| Prince Edward Island (PEI) | HST | 15% | 15% | Harmonized Sales Tax |
| Quebec | GST + QST | 5% GST + 9.975% QST | 14.975% | Quebec Sales Tax (QST) acts like PST. |
| Saskatchewan | GST + PST | 5% GST + 6% PST | 11% | PST applies to restaurant meals & alcohol. |
| Yukon | GST | 5% | 5% | No Territorial Sales Tax |
As you can see, the difference between dining in Calgary (5% tax) and dining in Halifax (15% tax) is significant!
What Gets Taxed?
When you look at your restaurant receipt, the sales tax (GST, PST/QST, or HST) is calculated on the subtotal of taxable items. This typically includes:
- All food items ordered.
- All beverage items ordered (including pop, juice, coffee, tea, beer, wine, spirits).
- Sometimes, mandatory service charges or automatic gratuities applied by the restaurant (e.g., for large groups) are also subject to sales tax, as they are considered part of the price of the service.
What Doesn’t Get Sales Tax?
There’s one key item on your bill that is not subject to GST/HST/PST: Your voluntary tip. Whether you add it via the payment terminal or leave cash, the tip amount is not taxed. The tax calculation happens before you add your gratuity. Your receipt should clearly show:
- Subtotal (cost of food and drinks)
- GST / PST / QST / HST amount(s)
- Total (Subtotal + Tax)
- Space for Tip (if applicable)
- Final Amount Charged (Total + Tip)
Why Does Understanding Restaurant Tax Matter?
While you can’t avoid paying the required taxes, understanding them helps you:
- Budget Accurately: Knowing the local tax rate helps you estimate the final cost of dining out.
- Read Your Bill Clearly: Demystifies those extra lines and percentages.
- Spot Errors: Although rare, understanding how tax should be applied helps you notice any potential mistakes in calculation (like tax being charged on the tip).
The Final Course
Understanding sales tax on Canadian restaurant bills boils down to knowing which province you’re in and understanding whether they charge GST only, GST plus PST/QST, or a combined HST. Remember that virtually all food and drink served will be taxed at the prevailing rate(s) for that location, but your voluntary tip remains tax-free.
So next time you get the bill, you’ll know exactly what those GST, PST, or HST acronyms mean and why they’re there. Happy dining!