BC Restaurant + Hospitality Chart of Accounts for Xero (Free)

A British Columbia restaurant lives in the gentlest corner of the province’s two-tax system: the food it buys is mostly zero-rated, the meals it sells are PST-exempt at 5% GST, and the one sharp edge is behind the bar, where liquor collects a 10% provincial tax of its own. This Xero chart of accounts maps that landscape account by account.

Food in, food out, hardly any PST

Food stock and ingredients defaults to the custom Zero Rated rate, basic groceries being taxable at 0% everywhere in Canada, with the GST-only 5% alternative for snack foods and prepared inputs; either way, no PST, because BC exempts food for human consumption outright. Food and beverage sales mirrors it at the custom GST on Sales (5%) rate: the plated meal, the takeout bag, and the delivery order all leave at 5% with no provincial layer on the food itself.

Alcohol stock is the interesting account. Purchased for resale against your PST number, it arrives PST-exempt, just 5% GST, fully creditable. Sold, it collects the province’s special 10% liquor PST plus GST. The account notes carry both halves so bar margins compute from true numbers, and the dedicated PST payable account in the base chart receives what the bar collects for Victoria.

Where the 7% still bites

The kitchen’s durable goods keep BC’s ordinary rules: kitchen and bar equipment at the 12% pair, PST capitalizing into the asset; smallwares and consumables at 12%, the provincial share a straight cost; cleaning and laundry defaulting GST-only for services with the 12% alternative for chemical and paper goods. Liquor and business licences stay out of scope, fees to regulators not being supplies. The office layer behaves like every BC business: software and phones at 12%, insurance exempt, payroll out of scope.

Setup, then service

Create the five custom rates in Xero first (Tax menu, Tax settings, Tax rates), because the food accounts depend on rates the Canadian edition does not seed. Import through Accounting, Chart of accounts, Import, and check the preview’s restaurant signature: zeros and 5s down the food chain, 12s on the hardware.

1. Map the POS to post one daily summary: food sales at 5% GST, liquor sales with their 10% PST split out, tips as a liability, never revenue.
2. Reconcile monthly to the POS tax report, and the PST payable account to the provincial return.
3. Keep the resale exemption alive in purchasing: PST number on file with the liquor distributor, always.
4. Route mixed distributor invoices line by line; zero-rated flour and 5% snack stock on one slip is normal.

Catering keeps the kitchen’s friendly treatment on the road: off-site food is still food, PST-exempt at 5% GST, with the bar’s 10% following any liquor served. What changes is the equipment around the event, since rented tables, linens, and heaters are leased goods at 12% with the provincial share as cost. Quoting events from food cost alone and absorbing the rental PST is a quiet margin leak; the equipment rentals treatment in this chart is the reminder.

Gift cards stay a liability until redeemed, taxed when they buy the meal. Staff meals and comps consumed in-house fall under the federal 50% ITC limit, which is why the meals account carries its warning while stock accounts claim in full.

The pace of hospitality paper decides everything downstream. Hubdoc captures invoices as they arrive. ExpenseFlow reads each line, splits zero-rated stock from 5% and 12% items on the same delivery, keeps the liquor exemption and licence treatments straight, and posts coded entries into Xero against this chart. Dext rules the broadline distributors into consistency.

The QuickBooks version is at BC hospitality chart of accounts for QuickBooks; rate mechanics live in the BC Xero tax rates reference.