The Toronto restaurant tax rate is 13% Harmonized Sales Tax on nearly everything you order, made up of a 5% federal portion and an 8% Ontario portion charged as one line on your bill. A narrow exception drops the rate to 5% on qualifying prepared food and non-alcoholic drinks priced at $4.00 or less before tax. Alcohol is always taxed at the full 13%, and a mandatory service charge is taxed while a voluntary tip is not.
How the 13% Breaks Down
The HST combines what used to be two separate taxes. The 5% federal component is the GST. The 8% provincial component replaced Ontario’s old retail sales tax. Restaurants collect the combined 13% and remit it to the Canada Revenue Agency, which forwards Ontario’s share to the province.1Canada Revenue Agency. GST/HST Filing Penalties
Ontario’s 2026 budget proposed no changes to the rate, so 13% is the figure for the foreseeable future.2Government of Ontario. Annex: Details of Tax Measures and Other Legislative Initiatives
You may remember paying no tax at restaurants during the winter of 2024–2025. The federal government ran a temporary GST/HST holiday from December 14, 2024 through February 15, 2025 that removed the tax on restaurant meals. That break ended, and full 13% HST resumed on February 16, 2025.3Canada Revenue Agency. GST/HST Break – Closed
What the 13% Applies To
Basic groceries in Canada are zero-rated, meaning they carry 0% HST. Restaurant food does not qualify. The Excise Tax Act specifically excludes prepared food, heated food, and anything sold ready to eat from zero-rating.4Justice Laws Website. Excise Tax Act RSC 1985 c E-15 – Part III, Schedule VI
The 13% therefore applies to essentially everything on a standard menu: appetizers, entrees, desserts, coffee, tea, soft drinks, and alcohol. The CRA treats the following as taxable prepared food rather than groceries:
- Heated food and beverages, including anything from a warming case.
- Salads, unless canned or vacuum sealed.
- Sandwiches, unless frozen.
- Cheese, charcuterie, fruit, and vegetable platters.
- Coffee, tea, and fountain drinks poured at the point of sale.
- Single-serving baked goods sold individually in quantities under six.
- Any food sold under a catering contract.
If you eat or drink it at a Toronto restaurant, expect 13% on the bill.5Canada Revenue Agency. Basic Groceries
The $4.00 Rebate That Drops the Rate to 5%
Ontario waives the 8% provincial portion of HST on qualifying prepared food and beverages priced at $4.00 or less before tax. When the rebate applies, you pay only the 5% federal GST.6Canada Revenue Agency. Harmonized Sales Tax – Ontario Point-of-Sale Rebate on Prepared Food and Beverages
Qualifying items include heated food, salads, sandwiches, single-serving baked goods sold in quantities under six, hand-scooped ice cream, and non-carbonated beverages dispensed at the point of sale. A muffin and a drip coffee totalling $3.75 before tax qualifies. Buying something non-qualifying alongside a coffee does not push the coffee out of the rebate, because the $4.00 threshold counts only the qualifying prepared items.6Canada Revenue Agency. Harmonized Sales Tax – Ontario Point-of-Sale Rebate on Prepared Food and Beverages
The rebate is all or nothing. Once qualifying items in a single transaction exceed $4.00 before tax, the full 13% applies to the entire amount. There is no partial rebate on the first $4.00. Point-of-sale systems generally handle the calculation automatically, but on small orders it is worth checking the receipt.
Alcohol Is Always 13%
Beer, wine, and spirits at a licensed restaurant carry the full 13% no matter the price. A $3.50 beer does not qualify for the small-purchase rebate, because the rebate is limited to prepared food and non-alcoholic beverages. Alcohol is explicitly excluded from zero-rating under the Excise Tax Act.4Justice Laws Website. Excise Tax Act RSC 1985 c E-15 – Part III, Schedule VI
Ontario has separate beer and spirits taxes, but those apply mainly to retail purchases at stores, not to drinks at licensed restaurants and bars. When you order a drink at a Toronto restaurant, the 13% HST is typically the only tax line on the bill.7Government of Ontario. Beer Tax
Tips and Service Charges
Whether HST applies to a tip depends on one question: did you choose to leave it, or did the restaurant add it? A voluntary tip, whether left in cash or written onto a credit card slip, is not part of the meal’s price and is not subject to HST.8Canada Revenue Agency. GST/HST in Special Cases
Mandatory service charges are different. When a restaurant adds an automatic gratuity for a large party or builds a service fee into the bill, the CRA treats that charge as part of the price of the food, and the restaurant must charge 13% HST on it.9Canada Revenue Agency. GST/HST Information for the Travel and Convention Industry
The place to watch for an overcharge is a payment terminal that calculates HST on a total including a voluntary tip you entered yourself. If the tax line grew because of your tip, that is not correct. If it grew because of a printed automatic gratuity for a party of eight, that is. The difference adds up on large-party bills where a 15% or 20% auto-gratuity is in play.
Catering and Private Events
Booking a private dinner or catering service does not change the rate. The CRA applies the standard 13% HST to prepared food served at banquets and catered functions, including platters, hot meals, and beverages. Extras like wine-corking fees are also taxable.9Canada Revenue Agency. GST/HST Information for the Travel and Convention Industry
Room rental fees for private dining spaces are taxable as well. If the restaurant bills you separately for the room and for the meal, both lines carry 13% HST.