Most restaurant owners think VAT calculation is straightforward until they get hit with penalties. The reality? You're juggling two different VAT rates that can trip up even experienced operators. Here's how to calculate your quarterly VAT payment without nasty surprises.
VAT rates in hospitality
As a restaurant owner you work with two VAT rates that you need to track separately:
- 9% VAT: Food and non-alcoholic beverages in the restaurant
- 21% VAT: Alcoholic beverages (beer, wine, spirits)
This split makes calculating your VAT payment more complex than for other businesses.
⚠️ Note:
Takeaway and delivery also fall under 9% VAT, not 21%. This applies to both food and non-alcoholic beverages.
The basic formula for VAT payment
Your VAT payment consists of two parts:
- VAT on turnover: What you charged to guests
- Minus VAT on purchases: What you paid to suppliers
The formula is: VAT payment = VAT on turnover - VAT on purchases
💡 Example calculation:
Restaurant with €50,000 quarterly turnover:
- Food: €35,000 incl. 9% VAT = €2,890 VAT
- Beverages: €15,000 incl. 21% VAT = €2,603 VAT
- Total VAT on turnover: €5,493
Purchases with €1,200 VAT → Payment: €4,293
Calculating VAT from turnover
To extract VAT from your turnover, use these formulas:
- 9% VAT: Turnover incl. VAT ÷ 1.09 × 0.09
- 21% VAT: Turnover incl. VAT ÷ 1.21 × 0.21
Your till or accounting system can often split this automatically. Check if your system does this.
💡 Practical example:
Monthly turnover of €18,000:
- Food: €12,000 → VAT = €12,000 ÷ 1.09 × 0.09 = €991
- Beverages: €6,000 → VAT = €6,000 ÷ 1.21 × 0.21 = €1,041
- Per quarter: (€991 + €1,041) × 3 = €6,096 VAT on turnover
Deducting VAT on purchases
From your VAT liability you can deduct the VAT you paid on:
- Ingredients and beverages
- Equipment and furniture
- Energy and rent (if VAT-liable)
- Repairs and maintenance
Keep all invoices with VAT. Without an invoice, no deduction. This mistake costs the average restaurant EUR 200-400 per month in lost deductions – money that could stay in your pocket with proper record-keeping.
⚠️ Note:
Personnel costs have no VAT. Wages, social contributions and pension premiums cannot be deducted from your VAT liability.
Taking seasonal fluctuations into account
Restaurants often have seasonal fluctuations. Therefore calculate your VAT payment based on:
- Historical data: Same quarter last year
- Monthly trend: Average of last 3 months × 3
- Peak periods: Think of holidays, vacations, events
💡 Seasonal example:
Beach restaurant in Q2 (summer):
- Q1 turnover: €30,000 → VAT payment €2,100
- Q2 forecast: €80,000 → VAT payment €5,600
- Difference: €3,500 extra to set aside
Digital tools
A till system or accounting package can automate your VAT calculation. Look for these features:
- Automatic split of 9% and 21% VAT
- Integration with your accounting
- Quarterly overviews
- Forecasts based on trends
Food cost calculators can also help you understand your turnover structure, so you can better estimate how much VAT you need to pay.
How do you calculate your expected VAT payment? (step by step)
Split your turnover by VAT rate
Determine what percentage of your turnover is food/non-alcoholic (9%) and what percentage is alcoholic beverages (21%). Check this in your till system or estimate based on your menu.
Calculate VAT on expected turnover
Use the formulas: 9% VAT = turnover ÷ 1.09 × 0.09 and 21% VAT = turnover ÷ 1.21 × 0.21. Add both amounts together for your total VAT liability.
Deduct VAT on purchases
Add up all VAT you paid on ingredients, equipment and other business expenses. Deduct this from your VAT liability for your net payment.
✨ Pro tip
Calculate your expected quarterly VAT payment by the 15th of each month within that quarter. This gives you 45 days to adjust your cash reserves if needed.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
Do I have to pay VAT on tips?
No, tips that go directly to staff aren't part of your turnover. But service charges that you keep as a restaurant are subject to VAT.
What if I underestimate my VAT payment?
Then you'll receive a reassessment plus interest charges. Always estimate on the high side and set the money aside in a separate savings account.
Can I get VAT back if I've overpaid?
Yes, the Tax Authority refunds overpaid VAT. This usually happens within 3 weeks after filing your return.
How often do I have to file VAT as a restaurant?
Standard per quarter, unless your turnover exceeds €1.883 million. Then you must file monthly returns instead.
Does delivery fall under 9% or 21% VAT?
Delivery of food falls under 9% VAT, even if you deliver alcohol. Only the alcoholic beverages themselves fall under 21%.
What happens if I mix up the VAT rates on my return?
The Tax Authority will correct it and may impose penalties. Double-check your calculations before submitting, especially the food vs. alcohol split.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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