Las Vegas restaurant bookkeeping comes down to three numbers recorded correctly every week. Tips must be tracked separately from sales, payroll must follow Nevada wage rules, and food cost must be measured against sales. Together with labor, food cost forms prime cost, the figure that decides whether a restaurant makes money.
How should a restaurant record tips?
Tips belong to employees. They are not restaurant revenue. Card tips collected by the restaurant are a liability until they are paid out to staff.
- Record card tips in a tips payable account when the sale is recorded.
- Reduce that account when tips are paid through payroll or in cash.
- Reconcile tips payable to zero each pay period.
- Keep tip reports from the point-of-sale system with payroll records.
- Report tips through payroll so the correct taxes are withheld.
What does Nevada require for tipped employees?
Nevada does not allow a tip credit. Employers must pay tipped employees the full state minimum wage before tips, which differs from many other states. This raises labor cost as a share of sales for Nevada restaurants and makes accurate labor reporting more important.
What payroll items should a Las Vegas restaurant track?
| Item | Why it matters |
|---|---|
| Wages by position (kitchen, service, bar, management) | Shows where labor dollars go |
| Overtime | Nevada has daily overtime rules for some employees as well as weekly overtime |
| Tips reported | Drives payroll tax on tips |
| Employer payroll taxes | Part of true labor cost |
| Nevada Modified Business Tax | Quarterly state payroll tax for employers above the wage threshold |
| Benefits and meals | Part of total compensation |
How do you calculate food cost?
Food cost percentage is the cost of food used divided by food sales for the same period.
- Start with beginning inventory.
- Add purchases for the period.
- Subtract ending inventory. The result is the cost of food used.
- Divide by food sales.
For example, a restaurant with $8,000 in beginning inventory, $30,000 in purchases, and $9,000 in ending inventory used $29,000 of food. On $95,000 in food sales, food cost is 30.5 percent. Many full-service restaurants aim for roughly 28 to 35 percent, depending on the concept.
What is prime cost?
Prime cost is cost of goods sold plus total labor, including payroll taxes and benefits. Many operators aim to keep it at or below 60 to 65 percent of sales. Tracking it weekly lets you correct a problem before the month is lost.
| Weekly number | How to use it |
|---|---|
| Sales by category | Spot changes in mix between food, beverage, and other sales |
| Food and beverage cost percentage | Catch waste, theft, or price increases from suppliers |
| Labor percentage | Adjust scheduling to match sales |
| Prime cost percentage | Judge the overall health of the week |
What else should a Las Vegas restaurant reconcile?
- Point-of-sale sales reports to bank deposits, every day or week
- Delivery app deposits, with gross sales and fees recorded separately
- Sales tax collected to the returns filed with the Nevada Department of Taxation
- Gift cards sold and redeemed
Common questions
No. Tips belong to employees. Card tips the restaurant collects are recorded as a liability until paid to staff.
No. Nevada does not permit a tip credit, so tipped employees must receive the full state minimum wage before tips.
Many full-service restaurants aim for about 28 to 35 percent of food sales. The right target depends on the menu, prices, and service style.
Prime cost is the total of cost of goods sold and labor cost. Many restaurants aim to keep it at or below 60 to 65 percent of sales.
Review sales, food cost, labor, and prime cost every week, and complete a full close every month or four-week period.
See our restaurant bookkeeping services.
This article is general information for Nevada business owners. Filing rules and deadlines change, so confirm the requirements for your business with the agency involved or with your CPA.
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