What is the New York tip credit for food service workers in 2026?
For 2026, a tipped food-service worker in New York City, Long Island, and Westchester County must receive a cash wage of at least $11.35 per hour, with the employer able to take a tip credit of up to $5.65 — together meeting the $17.00 minimum wage. In the rest of New York State, it’s a $10.70 cash wage plus a $5.30 tip credit. Two conditions matter: under the 80/20 rule, you can’t take the tip credit for shifts where the worker spends more than two hours or 20% of the shift on non-tipped work, and if a worker’s tips don’t bring them to the full minimum in a given week, you must make up the difference. We structure payroll to these rules and check the weekly top-up.
Is takeout and delivery food taxable in New York?
Yes. In New York, prepared and heated food sold for immediate consumption is subject to sales tax whether it’s eaten on premises, taken out, or delivered — there’s no off-premises exemption for prepared food. Rates reach 8.875% in New York City. A common and costly error is failing to charge sales tax on delivery and takeout orders, or mis-coding the grocery-versus-prepared distinction: an unheated whole loaf of bread sold as-is may be exempt, but the moment it becomes a sandwich or is heated, it’s fully taxable. We set your POS and books so the right items are taxed across every channel and your return reconciles.
Can you reconcile my POS system to QuickBooks?
Yes — it’s the foundation of restaurant bookkeeping. Your POS captures gross sales, comps and discounts, tips, tax collected, and processor fees, and pays out a net deposit that doesn’t match gross sales. We map all of those components from Toast, Square, Clover, or your system into QuickBooks and reconcile against daily bank deposits, so your books reflect true sales, your tax collected is accurate, and your food-cost and prime-cost percentages are based on real numbers rather than the net deposit.
How do you handle tip reporting and the new federal rules?
We track cash and charged tips and report them through payroll with the reporting detail now required, so the numbers are correct for both you and your staff. Recent federal law introduced a deduction on qualified tips and added specific W-2 reporting codes for tips and qualified overtime; if those codes are missing, employees can struggle to claim the deduction. We keep your tip reporting structured so your team can take advantage of it and your payroll stays compliant. Your CPA confirms the tax treatment. TechBrot does not prepare or file tax returns; we work with your CPA or EA. We handle the books and payroll records behind it.
Are mandatory gratuities and service charges taxable in New York?
It depends on three conditions. Voluntary tips a customer leaves for the staff are not subject to sales tax. A mandatory gratuity added to the bill is exempt only if it is shown separately on the bill, identified as a tip or gratuity, and every dollar of it goes to employees; if any one of those conditions is missed, the gratuity is taxable along with the rest of the bill. A service charge the restaurant keeps is taxable. In the books, gratuities owed to staff sit in a liability account that clears to payroll, so the record shows they reached employees, and house-kept charges are booked as taxable sales. That is the New York Tax Department’s position in TB-ST-806 and TB-ST-320.
What sales records does New York require a restaurant to keep?
The Tax Department’s restaurant bulletin, TB-ST-806, says guest checks should be sequentially numbered and register tapes dated, and that all guest checks and register tapes must be kept for at least three years from the due date of the return they relate to, or the date it was filed if later. Sales records must have enough detail to prove the taxability of each item sold and the amount of nontaxable to-go sales; summary reports and daily “Z” tapes are not sufficient. So the daily close keeps the item-level POS detail behind each day’s summary entry, and the monthly close ties the sales-tax return to it.
How much does restaurant bookkeeping cost in New York?
Monthly bookkeeping for a New York restaurant runs $500–$2,500+ per month, fixed-fee against a written scope. Pricing is set by sales volume, the number of locations, payroll headcount and complexity, and how many delivery and POS channels we reconcile — a single small cafe is at the lower end; a multi-location operation with heavy payroll and several delivery platforms higher. We quote a firm number after reviewing your books.
What makes restaurant accounting different in New York?
Two rules decide thin margins. Tip-credit payroll: for 2026, $11.35 cash plus a $5.65 credit in New York City, Long Island and Westchester, and $10.70 plus $5.30 elsewhere, with the 80/20 rule applied. Sales tax: prepared food is taxable for dine-in, takeout and delivery, at up to 8.875% in New York City, and records must prove each item’s taxability. Z tapes alone are not enough.