The Hidden Tax Cost of Delivery Commissions

What a 25% commission actually costs you

A $40 delivery order at a 25% commission rate doesn't cost you $10 in fees. It costs you more, because GST/HST is charged on the commission itself.

Here's the part most independent operators miss: delivery platforms charge sales tax on their service fees. DoorDash, Uber Eats, and SkipTheDishes all add GST (and HST or QST, depending on your province) to the marketplace commission they bill you. That tax shows up on your platform invoice, but unless you're actively claiming it back through input tax credits, you're eating a cost that's 13-15% higher than the commission rate suggests.

For a 40-seat restaurant doing $8,000 a month in delivery revenue at a 25% commission, the difference between the contract rate and your real cost is somewhere between $1,200 and $1,800 per year. That's not a rounding error. That's a line cook's weekly pay.

How GST/HST applies to delivery commissions

Delivery platform commissions are a taxable supply under Canadian tax law. The platform is supplying you a service (marketplace access, payment processing, delivery logistics), and that service attracts GST/HST.

What this means in practice:

Your platform contract says 25% commission. But your monthly invoice shows something closer to 26.25% in Alberta (5% GST), 28.25% in Ontario (13% HST), or 28.74% in Quebec (5% GST + 9.975% QST). The tax is calculated on the commission amount, not on the order total, but it still comes out of your revenue.

The platforms handle this correctly on their invoices. Uber Eats charges applicable taxes on marketplace fees and issues invoices showing the tax amount separately. DoorDash and SkipTheDishes follow the same structure. The question isn't whether the tax is there. It's whether you're doing anything about it.

The province-by-province cost of a $40 delivery order

The tax bite on your commission varies significantly by province. Here's what a single $40 order at a 25% commission actually costs you across Canada:

Province	Tax on Food Sale	Commission (25%)	Tax on Commission	Total Commission Cost	Effective Rate
Alberta	5% GST	$10.00	$0.50	$10.50	26.25%
British Columbia	5% GST	$10.00	$0.50	$10.50	26.25%
Saskatchewan	5% GST	$10.00	$0.50	$10.50	26.25%
Manitoba	5% GST	$10.00	$0.50	$10.50	26.25%
Ontario	13% HST	$10.00	$1.30	$11.30	28.25%
Quebec	5% GST + 9.975% QST	$10.00	$1.50	$11.50	28.74%
New Brunswick	15% HST	$10.00	$1.50	$11.50	28.75%
Nova Scotia	15% HST	$10.00	$1.50	$11.50	28.75%
PEI	15% HST	$10.00	$1.50	$11.50	28.75%
Newfoundland	15% HST	$10.00	$1.50	$11.50	28.75%

In the Atlantic provinces, your "25% commission" actually runs at 28.75%. That's nearly four extra percentage points you're paying on every order. Over a year, it adds up fast.

What this looks like at $8,000 per month in delivery sales

Most delivery articles quote the commission rate. Here's what actually leaves your bank account, using a 40-seat independent doing $8,000/month through delivery apps at a blended 25% commission:

Line Item	Alberta (GST)	Ontario (HST)	Quebec (GST+QST)	Atlantic (HST)
Monthly delivery revenue	$8,000	$8,000	$8,000	$8,000
Commission (25%)	$2,000	$2,000	$2,000	$2,000
Tax on commission	$100	$260	$299	$300
Total monthly commission cost	$2,100	$2,260	$2,299	$2,300
Annual commission cost	$25,200	$27,120	$27,590	$27,600
Annual tax-on-commission alone	$1,200	$3,120	$3,590	$3,600

An Ontario restaurant paying $3,120 per year in tax on delivery commissions alone. A Nova Scotia restaurant paying $3,600. These numbers are real, and they're sitting in your platform invoices right now.

Input tax credits: the money most restaurants leave on the table

Here's the part that changes the math. If you're registered for GST/HST (and if your annual revenue exceeds $30,000, you're required to be), you can claim input tax credits on the GST/HST portion of your delivery commissions.

That $3,120 in annual tax on commissions for an Ontario restaurant? You can get that back on your GST/HST return. Same with the $3,600 in Atlantic Canada, and the $1,200 in Alberta.

But you have to actually claim it.

Input tax credits work like this: you paid GST/HST on a business expense (the platform commission). You can recover that tax by reporting it on your GST/HST return. The platform's invoice is your documentation. The CRA needs to see the supplier's GST/HST registration number, the tax amount, and the invoice date. All three platforms provide this on their monthly statements.

The catch: many independent operators don't reconcile their delivery platform invoices with their tax filings. The commission comes off the top of each payment, the platform deposits the net amount, and the owner records the deposit as revenue. The GST/HST on the commission never makes it onto the books as a claimable expense.

A restaurant accountant who understands delivery economics will catch this. A shoebox-of-receipts approach to bookkeeping won't.

Why the platforms don't explain this to you

This isn't a conspiracy. Delivery platforms are technology companies, not tax advisors. Their job is to process orders, not to optimize your tax position. Uber's Canadian tax FAQ states that you, the restaurant, are the seller for tax purposes. The platform collects and remits some taxes on your behalf, but the commission tax is billed to you as a business expense. Claiming it back is your responsibility.

DoorDash and SkipTheDishes operate similarly. They'll give you the invoice. They won't tell you what to do with it.

The real after-tax cost of delivery: a complete picture

Once you factor in the ITC recovery, the math shifts. But the commission is still only part of the cost. Here's the full picture for a $40 order in Ontario (13% HST):

Cost Component	Amount	% of Order
Food cost (30%)	$12.00	30.0%
Commission (25%)	$10.00	25.0%
HST on commission	$1.30	3.25%
Packaging	$1.50	3.75%
HST on packaging	$0.20	0.49%
Labour (prep + packaging)	$2.50	6.25%
Total cost per order	$27.50	68.7%
ITC recovery (HST on commission + packaging)	-$1.50	-3.74%
Net cost per order	$26.00	65.0%
Net margin per order	$14.00	35.0%

Without claiming ITCs, your margin on that order is $12.50 (31.3%). With ITCs claimed, it's $14.00 (35.0%). The difference across hundreds of monthly orders turns into thousands of dollars annually.

And this table still doesn't include the merchant processing fees on the dine-in revenue you might have earned if that customer had walked in instead. Delivery revenue isn't incremental revenue for every restaurant. Sometimes it's replacement revenue at a lower margin.

Five things to do this week

1. Download your platform invoices. All three platforms (DoorDash, Uber Eats, SkipTheDishes) provide monthly or period-end invoices in your merchant portal. Download the last 12 months.

2. Find the tax line. Look for the GST/HST (or QST in Quebec) charged on your marketplace commission. It's a separate line item. Add it up for the year.

3. Check your GST/HST returns. Are you already claiming input tax credits on delivery commissions? If you use a bookkeeper, ask them directly. If you file yourself, check whether the platform tax appears in your ITC calculations.

4. Talk to your accountant. If you haven't been claiming ITCs on delivery commissions, you can file adjustments for up to four years of past returns. That's potentially $5,000-$14,000 in recovered tax for a restaurant doing $8,000/month in delivery, depending on your province.

5. Build it into your delivery profitability model. When you evaluate whether delivery makes sense for your restaurant, use the after-ITC commission cost, not the contract rate. The real number is lower than what leaves your account each month, but still higher than most operators assume.

Where this fits in the bigger picture

The tax cost of delivery commissions is one piece of a larger profitability question. Your commission rate, your food cost on delivery items, your packaging spend, and your labour allocation all matter. But the tax layer is the one that's most often invisible.

If you've been running delivery without modeling the full cost, start with the commission math. It's the fastest way to understand whether delivery is making or losing you money. And if it's losing you money, the solution isn't always to quit the platforms. Sometimes it's renegotiating your rate, building a direct ordering channel, or adjusting your delivery menu to favour high-margin items.

The point isn't to scare you off delivery. It's to make sure you're working with real numbers.

Sources: CRA GST/HST for Businesses, CRA Input Tax Credits, Uber Eats Canada Tax FAQ for Merchants, CRA Eating Establishments Policy.

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