How do you record daily restaurant sales with VAT in the UAE?

Menu prices in the UAE must include 5% VAT, so split every day's takings: VAT is 5/105 of the VAT-inclusive total. On AED 10,500 of sales, AED 500 is VAT owed to the Federal Tax Authority and AED 10,000 is revenue. Debit cash and card receivables for AED 10,500, credit sales AED 10,000 and credit VAT payable AED 500. This applies once the restaurant is VAT-registered.

How do you account for Talabat or noon payouts?

Record the gross sale, not the net payout. Debit the platform as a receivable for the full order value, credit sales and output VAT, then record the platform's commission as an expense, with the VAT the platform charges on its commission as input VAT if you hold a valid tax invoice. When the payout arrives, debit bank and credit the platform receivable. Booking only the net payout understates sales and the cost of the channel.

How do you calculate food cost in restaurant accounting?

Use stock counts, not purchases: opening stock plus purchases minus closing stock equals the cost of food used. Then post an entry that moves the difference between that figure and the purchases already booked into stock. Food cost percentage is cost of food used divided by food sales.

How is end-of-service gratuity calculated for restaurant staff in the UAE?

Under Federal Decree-Law No. 33 of 2021, a full-time foreign worker with at least one year of continuous service earns 21 days of basic wage for each of the first five years and 30 days for each year after that, based on the last basic wage only, capped at two years' wage. Restaurants should provide for it every month: debit staff costs and credit the gratuity provision.

Can I keep restaurant accounts in Excel?

For a small restaurant, yes, if every entry is supported by documents and the file is backed up, because the Federal Tax Authority requires VAT records to be kept for at least five years and corporate tax records for seven. Most restaurants move to accounting software once they handle several delivery apps or more than one outlet, because reconciling payouts by hand takes too long.

Restaurant Accounting Entries in the UAE: Worked Examples With VAT (2026)

A UAE restaurant's books come down to six recurring entries: daily sales with 5% VAT split out, delivery-app sales recorded gross with commission as an expense, purchases, a monthly food cost adjustment from stock counts, payroll, and a monthly end-of-service gratuity provision. Get these six right and your VAT return, corporate tax return and monthly P&L all come out of the same numbers. The examples below use round illustrative figures; the rules behind them come from the Federal Tax Authority and UAE labour law.

Written by Sawan Kumar, Chartered Accountant. Examples are illustrative; confirm treatment of your own transactions with your accountant or a registered tax agent.

1. How Do You Record Daily Sales With VAT?

UAE menu prices must include VAT (FTA), so the VAT inside a VAT-inclusive price is 5/105 of it. A day's dine-in takings of AED 10,500 contain AED 500 of VAT.

Account	Debit (AED)	Credit (AED)
Card settlements receivable	8,400
Cash	2,100
Food and beverage sales		10,000
VAT payable (output VAT)		500

When the card provider pays out, debit the bank and credit the receivable, and post its fee as an expense. Where restaurants go wrong: booking AED 10,500 as revenue. That overstates sales by the VAT and makes the return impossible to reconcile.

This applies once you are VAT-registered: registration is mandatory above AED 375,000 of taxable supplies in the previous 12 months, and voluntary above AED 187,500 (FTA).

2. How Do You Record Talabat and noon Sales?

Record the gross order value, then the platform's deductions. Take AED 2,100 of app orders (VAT-inclusive) with a 25% commission on the net food value. noon Food publishes a 25% rate; use the rate in your own contract.

When the orders are made:

Account	Debit (AED)	Credit (AED)
Delivery platform receivable	2,100
Food and beverage sales		2,000
VAT payable (output VAT)		100

When the platform statement arrives (commission AED 500, plus 5% VAT on it):

Account	Debit (AED)	Credit (AED)
Delivery platform commission (expense)	500
VAT recoverable (input VAT)	25
Delivery platform receivable		525

When the payout lands: debit the bank AED 1,575, credit the platform receivable AED 1,575. The receivable is now zero, which is your check that the statement is fully booked.

Treat restaurant-funded discounts the same way: a separate expense line, so you can see what each promotion actually cost. Claim input VAT only with a valid tax invoice from the platform. Our Talabat vs noon guide explains the rates.

3. How Do You Record Purchases?

A supplier invoice for AED 4,200 including VAT, from a VAT-registered supplier:

Account	Debit (AED)	Credit (AED)
Food purchases	4,000
VAT recoverable (input VAT)	200
Accounts payable: supplier		4,200

Keep every supplier invoice: VAT records must be kept for at least five years (FTA).

4. How Do You Get Food Cost Right?

Purchases are not food cost. Food cost is what you used:

Opening stock + purchases − closing stock = cost of food used

With opening stock of AED 12,000, purchases of AED 40,000 and a counted closing stock of AED 14,000, the cost of food used is AED 38,000. Stock went up by AED 2,000, so move that out of purchases:

Account	Debit (AED)	Credit (AED)
Food stock (balance sheet)	2,000
Food purchases		2,000

On food sales of AED 120,000, food cost is 38,000 ÷ 120,000 = 31.7%. Our food cost percentage guide shows what to compare it with.

Where restaurants go wrong: skipping the month-end count. Without it, a big delivery on the 30th makes one month look terrible and the next look brilliant.

5. How Do You Record Payroll and Gratuity?

Post salaries as usual. Then provide for end-of-service gratuity every month, so the cost lands in the month it is earned rather than the day someone leaves.

Under Federal Decree-Law No. 33 of 2021, a full-time foreign worker with at least one year of continuous service earns 21 days' basic wage for each of the first five years and 30 days for each year after, on the last basic wage only, capped at two years' wage (UAE government portal).

For a cook on a basic wage of AED 3,000 a month, one year earns about 21 × (3,000 × 12 ÷ 365) ≈ AED 2,071, or about AED 173 a month:

Account	Debit (AED)	Credit (AED)
Staff costs: gratuity	173
Provision for end-of-service benefits		173

Illustrative calculation; check the daily-wage method your accountant uses.

6. How Do You Record Fit-Out and Equipment?

Fit-out and kitchen equipment are fixed assets, not month-one expenses. Record them on the balance sheet and depreciate them over their useful life, often the lease term for fit-out. Expensing a large fit-out in one month makes the restaurant look loss-making when it is not, and misstates taxable income.

What Does a Simple Excel Setup Look Like?

If you start in Excel, keep one sheet per item below and one journal sheet that every number flows into:

Sheet	What goes in it
Daily sales	Date, dine-in, takeaway, each app, cash, card, VAT split
App statements	Each platform's gross sales, commission, VAT on commission, discounts, payout
Purchases	Supplier, invoice number, net, VAT, total, paid date
Stock counts	Monthly count by category, valued at cost
Payroll	Basic wage, allowances, gratuity provision
Journal	Every entry above, dated, with a document reference

Back it up, and keep the documents behind every line. Most restaurants move to accounting software once they have several apps or a second outlet, because reconciling payouts by hand takes too long. For the full picture of what the books must cover, see restaurant accounting and bookkeeping in Dubai, and for the statement these entries produce, see the line-by-line restaurant P&L.