24 answers
Restaurant money questions, answered
Direct, sourced answers to the money questions restaurant owners actually ask: Toast processing fees, the FICA tip credit, delivery-app error charges, supplier invoices and held deposits. Each page opens with the answer, then shows the numbers, the deadline and the source.
Card processing fees
- How much does Toast charge per transaction?Toast does not publish a rate card; rates are set in each merchant's agreement.
- Did Toast raise its processing fees?Yes, for some accounts.
- Can you get a refund for Toast processing errors?Yes, if you report it in time.
- What is a good effective rate for restaurant card processing?There is no single good number, because your effective rate depends on card mix: debit is far cheaper than premium rewards credit, and card-present is cheaper than keyed.
- Why are card-not-present rates higher for restaurants?Card-not-present payments carry more fraud risk, so card networks charge more interchange.
- Is interchange-plus or flat-rate pricing better for a restaurant?Interchange-plus usually wins for restaurants with a lot of debit and basic credit cards, because a flat rate charges them the same as premium rewards cards.
FICA tip credit (Section 45B)
- What is the FICA tip credit?The FICA tip credit, Section 45B of the tax code, is a federal income tax credit for food and beverage businesses equal to the 7.65% employer Social Security and Medicare tax paid on employee tips, except the tips needed to bring each employee's pay up to $5.15 an hour.
- How is the FICA tip credit calculated?For each employee and each month, subtract the tips needed to lift cash wages to $5.15 an hour from total tips.
- Can you claim the FICA tip credit for past years?Yes.
- What is the difference between the FICA tip credit and the FLSA tip credit?They are unrelated.
- Does "no tax on tips" change the FICA tip credit?Not for restaurants.
Delivery-app error charges
- What is a DoorDash error charge?A DoorDash error charge is a deduction from a restaurant's payout when a customer reports a missing or incorrect item that DoorDash attributes to the store.
- How long do you have to dispute a DoorDash error charge?You have 14 days.
- How long do you have to dispute an Uber Eats order error?Uber Eats allows 30 days from the order date to dispute an order error adjustment, using the dispute button in the Orders tab of Uber Eats Manager.
- How long do you have to dispute a Grubhub order adjustment?Grubhub gives restaurants 30 days to dispute a prepaid order adjustment, extended from 7 days on July 18, 2022, with no cap on the number of disputes.
- Can a third party dispute DoorDash or Uber Eats charges for my restaurant?No.
- What evidence wins a delivery-app dispute?Evidence that ties the finished order to its order ID wins.
Sales tax paid twice on delivery orders
- Do restaurants pay sales tax on DoorDash orders?It depends on your state.
- Am I paying sales tax twice on delivery-app orders?You may be, if your state makes the delivery platform the marketplace facilitator and your sales tax return still includes those orders as taxable.
- How long do you have to claim a sales tax refund?Usually 3 or 4 years, but each state counts differently.
Supplier invoice errors
- How do you audit food supplier invoices?Check each delivery against the invoice before the driver leaves, then compare invoice prices with your quoted or contracted prices weekly, and match credit memos to statements monthly.
- Why do restaurants lose supplier credit memos?A credit memo is a supplier's written agreement that you owe less, issued for shorted, damaged or returned items.
Held deposits and equipment leases
- Why is my payment processor holding my restaurant's funds?Processors hold deposits when a payment or pattern looks risky: an unusually large ticket, a sudden jump in volume, rising chargebacks or refunds, or missing verification.
- Can you cancel a credit card machine lease?Usually not without paying the remaining balance: most card terminal leases are written as non-cancellable for several years.
Free leak scan
Find out what your restaurant is owed
Send exports, not logins: processor statements, payout reports, delivery-app CSVs and payroll summaries. We return a written list of what looks recoverable, what each item is worth, and which deadlines are still open. If something is worth pursuing, we quote the recovery before you commit to anything.
Request a free leak scanFrequently asked questions
- What restaurant money questions does Pavado answer?
- Pavado's restaurant guides cover processing fees, the FICA tip credit, delivery-app error charges, supplier invoice errors and held deposits. Each question page starts with a direct answer and includes supporting detail and sources.
- What is the best place to start reviewing restaurant money leaks?
- Start with the records behind the cost you want to check: processing statements, payroll exports, delivery order reports or supplier invoices. Pick the matching topic in this directory, then use its calculation, evidence checklist and linked sources to decide what needs review.
- Do these answers replace a review of my restaurant's records?
- No. These pages explain common issues. Your actual fees, eligibility, deadlines and potential recovery depend on your records, agreements and circumstances. Use the guides to prepare questions for your provider or professional adviser.