November 5, 2025
The rise of food delivery in Canada is transforming how restaurants and consumers interact with the food service industry. As apps like Uber Eats, DoorDash, and SkipTheDishes surge in popularity, they introduce questions about taxes on delivery fees.
With complex federal (GST/HST) and provincial (PST/RST/QST) tax rules in play, and recent legislative changes in several provinces, understanding the full tax picture is essential for restaurants, delivery platforms, drivers, and consumers.
This comprehensive guide covers everything you need to know about the taxation of food delivery fees in Canada as of 2025: how and when they are taxed, who remits the tax, recent policy changes, and practical steps for businesses and consumers alike.
At a Glance:
A food delivery fee refers to any additional charge applied to the delivery of prepared food, beverages, or groceries, whether imposed by the restaurant itself or by a third-party delivery platform like Uber Eats, DoorDash, or SkipTheDishes.
While it may seem like a single charge to the customer, how that fee is treated for tax purposes depends on who collects it, what is being delivered, and where the transaction occurs.
The food delivery fee is charged by:
1. Restaurant-operated delivery: When a restaurant handles delivery directly, using its own staff or vehicles, the delivery fee is typically subject to the same GST/HST rate as the food being sold.
For example, a pizza restaurant in Ontario charges $25 for a pizza (taxable at 13% HST) and a $4 delivery fee. The entire $29 is subject to 13% HST because the delivery service is part of the taxable meal.
2. Third-party delivery platforms: If a platform such as Uber Eats or DoorDash facilitates the order and charges a separate delivery or service fee, it is acting as a marketplace facilitator.
These platforms are required by the CRA (Canada Revenue Agency) to collect and remit GST/HST on delivery and service fees, regardless of whether the restaurant itself is GST/HST-registered.
3. Hybrid or combination models: Some restaurants use both their own delivery teams and third-party apps. In such cases, the tax treatment depends on which channel the customer uses to place the order.
For example, if a customer orders directly from the restaurant’s website (restaurant delivery), the restaurant handles tax collection. If the same order is placed via Uber Eats, Uber collects and remits the applicable GST/HST on the food and delivery charges.
The nature of the food also affects whether GST/HST applies:
Tax rates also vary across provinces depending on whether they charge GST only or HST (a harmonized combination of federal and provincial sales tax). For example:
The applicable rate is generally based on the province where the delivery occurs, not where the restaurant is located.
The CRA treats delivery services as an integral part of the food supply if they are provided by the same vendor. However, when the delivery is handled by a third-party marketplace facilitator, it is treated as a separate taxable service.
For businesses, this distinction affects how they collect, report, and remit GST/HST, and whether they must register for a GST/HST account under the new digital platform rules introduced in 2021.
Also Read: How to Make a Small Restaurant Grow: Top 33 Tips
Food delivery transactions in Canada can trigger multiple layers of taxation depending on the location, nature of the sale, and who provides the delivery service. While the Goods and Services Tax (GST) or Harmonized Sales Tax (HST) applies federally, several provinces add their own Provincial Sales Tax (PST) or equivalent, creating variations across regions.
Understanding these distinctions is critical for restaurants, cloud kitchens, and delivery platforms operating nationally.
At the federal level, food delivery fees fall under GST/HST regulations, which apply to most taxable supplies of goods and services, including prepared meals and delivery services.
Under CRA rules, delivery charges are taxed at the same rate as the food or beverage being delivered if the delivery is part of the same transaction.
For example, a $30 meal delivered in Ontario (13% HST province) would have tax applied to both the meal and the delivery fee at the 13% rate.
Conversely, if the order includes zero-rated basic groceries (e.g., uncooked produce or packaged bread), the food itself may be exempt, but the delivery service could still be subject to 5% GST or full HST, depending on how it’s invoiced.
The 2021 Digital Economy GST/HST rules clarified that digital platforms and marketplace facilitators (like Uber Eats or DoorDash) must collect and remit GST/HST on all delivery, service, and convenience fees charged to customers, regardless of the restaurant’s own tax registration status.
Several provinces impose additional provincial sales taxes on goods and services, which can also apply to delivery-related fees:
Each province defines the point of taxation based on where the delivery occurs, not where the order was placed. For restaurants serving multiple provinces, this can require multi-jurisdictional tax registration or reliance on platforms that handle collection and remittance.
While uncommon, some municipalities impose local restaurant or hospitality surcharges that can indirectly affect delivery fees:
These are not typically “sales taxes” but can increase the effective cost of food delivery services, especially for high-volume operators.
Also Read: Kitchen Order Ticket System in a Restaurant: How It Works
When restaurants or delivery platforms charge customers for delivery, the tax treatment depends on what is being delivered, how the delivery fee is invoiced, and where the delivery takes place.
Under Canadian tax law, food delivery is typically treated as a service incidental to the sale of goods, meaning it generally follows the same tax status as the underlying food order.
Federal GST/HST Rules: At the federal level, the Goods and Services Tax (GST) or Harmonized Sales Tax (HST) applies to most prepared foods and related services, including delivery.
In general:
Let’s break this down further:
Provincial PST, RST, and QST Rules: At the provincial level, several jurisdictions impose additional taxes on delivery-related services, often mirroring federal GST/HST principles but with localized compliance requirements:
Delivery fees generally follow the tax treatment of the underlying food sold. Bundling vs. itemizing delivery charges can change the tax outcome. Digital platforms must collect and remit GST/HST (and provincial taxes) on all related service and delivery charges.
Restaurants offering hybrid models (own drivers + platforms) should separate transactions to maintain clear tax compliance.
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Who collects and remits sales tax depends on how and where the transaction occurs — and who facilitates it.
1. Direct restaurant delivery: If a restaurant takes orders through its own website, app, or phone and manages its own delivery fleet, it is responsible for charging, collecting, and remitting GST/HST (and any applicable PST/RST/QST) on both the food and delivery charges.
The restaurant must apply the correct rate based on the province of delivery, even if the restaurant operates in another province.
2. Third-party platforms (marketplace facilitators): Under Canada’s marketplace facilitator rules (2021–2025), platforms such as Uber Eats, DoorDash, SkipTheDishes, and Fantuan are treated as the suppliers of record for tax purposes.
This means they must collect and remit all applicable GST/HST and provincial taxes on both:
These rules apply even if the restaurant itself is not GST-registered, simplifying compliance for small businesses.
3. Hybrid or partner models: If a restaurant sells both directly and through platforms, it may have split tax responsibilities, collecting its own tax for direct orders while the platform remits for marketplace transactions. Restaurants must keep separate accounting for these channels to avoid under- or over-reporting.
In short, most third-party delivery fees are now remitted by the platform, while self-managed delivery remains the restaurant’s responsibility. Understanding which category each sale falls under helps avoid CRA penalties and ensures compliance.
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In late 2024, the federal government introduced a temporary GST/HST “break” on restaurant meals and delivery fees (Dec 2024 – Feb 2025), as part of its affordability legislative package.
This relief:
Additionally, provinces like BC continue to cap fees charged by delivery platforms to protect small restaurants, but this does not affect taxation—only what portion of the price is subject to tax.
In addition, there are special provincial considerations:
British Columbia (BC):
Manitoba & Saskatchewan:
Quebec:
Ontario and other HST provinces:
It’s almost important to consider that drivers for delivery platforms are typically independent contractors for tax purposes. As of 2025:
Drivers must also account for tips, mileage/vehicle deductions, and other business expenses on their tax return. Provincial sales tax does not generally apply to driver income, but GST/HST may, in certain circumstances.
Also Read: How to Start and Run a Successful Restaurant in 10 Simple Steps
Understanding how food delivery fees are taxed in Canada is no longer optional. It’s a vital part of running a compliant and profitable restaurant. With new GST/HST and provincial tax rules, accuracy depends on who delivers the food, where it’s delivered, and how the order is processed.
While third-party platforms like Uber Eats and DoorDash now collect and remit taxes on behalf of restaurants, businesses managing their own delivery must ensure proper tax application and reporting. That’s where modern systems like iOrders help, with integrated ordering, reporting, and compliance tools that simplify tax tracking and reduce administrative errors.
Take control of your restaurant’s delivery, data, and compliance. Book a free demo with iOrders today to see how smarter automation can keep your operations efficient and tax-ready.
1. How do gig platforms’ new CRA reporting rules affect food delivery drivers’ tax obligations in 2025?
Under new federal regulations, platforms like Uber Eats and DoorDash must report gross income for gig workers directly to the CRA. This means delivery earnings are automatically visible to tax authorities, eliminating the possibility of underreporting or missing income on your return. Accurate record-keeping is now more important than ever.
2. Does the CRA’s reporting change the deadline for delivery driver tax filing in Canada?
Delivery gig workers must file personal tax returns by June 15, if self-employed, but any taxes owed must be paid by April 30. Digital platforms now issue annual summaries, but drivers remain responsible for self-filing using official forms like T2125 for business income.
3. If I earn delivery fees part-time, am I required to set aside money for taxes and CPP?
Yes, because no taxes, CPP, or EI are directly withheld. Drivers should save roughly 25-30% of delivery income for annual tax liability and Canada Pension Plan contributions, regardless of part-time status, to avoid costly surprises at tax time.
4. Are tips earned through food delivery apps taxable along with delivery fees?
Both cash and digital tips received by drivers are considered taxable income, whether paid directly or via app. App-earned tips appear in annual reports, but drivers must track and report cash tips separately on their tax returns.
5. What business expenses can a food delivery driver deduct from taxable delivery fees?
Drivers can deduct reasonable expenses like fuel, vehicle maintenance, insurance, tolls, phone/data charges, parking, and even a portion of their vehicle’s depreciation based on business-use percentage. These deductions reduce net taxable delivery income.
6. When do drivers have to register for GST/HST as a food delivery contractor?
Drivers must register for GST/HST and begin remitting once their gross delivery income exceeds $30,000 in any four consecutive quarters. Voluntary registration is also possible to reclaim GST/HST on business expenses even below this threshold.
7. How does vehicle use percentage impact food delivery drivers’ tax deductions?
To claim car-related deductions, drivers must calculate the percentage of kilometers driven for delivery vs. total kilometers. Only the business-use proportion of costs (fuel, repairs, insurance, depreciation) is deductible. Accurate logs are crucial for CRA compliance.
