Does Toast file taxes on our restaurant’s behalf?

Does Toast file taxes on my behalf or the restaurant’s behalf? If so, what taxes exactly?

Toast Payroll

Toast Payroll will file and remit payroll taxes on the restaurant's behalf if they utilize Toast Payroll. Toast Payroll files federal Forms 940 and 941 and manages employee-related taxes like Medicare, Social Security (FICA), and unemployment insurance. See Toast Payroll: Tax Filing and Year-End Tax FAQ for more info. An employer can manage their state and city/local taxes by visiting the Tax Accounts page in Toast Payroll.

There are some taxes that Toast does not file on Toast Payroll customers’ behalf, however; see Toast Taxes We Do Not Process for more info.

Sales Tax

Per the terms of the Merchant Agreement between you and Toast, you acknowledge and agree that Toast has no obligation to determine whether taxes apply to your business or transactions, or to calculate, collect, report, or remit any taxes to any tax authority arising from any payment. Restaurants hold the responsibility for remitting sales taxes.

Toast does provide reporting on sales tax based on your configuration under Menus > Settings > Manage tax rates. You can view and manage collected taxes in two ways:

1. Tax Summary Report: Located under Reports > Accounts > Accounting Overview > Taxes.
2. Sales Summary Report: Located under Reports > Sales > Sales summary.

If your restaurant integrates with , they automate sales tax management by setting aside taxes daily based on your sales data. They also handle the filing and remittance for you. Even with DAVO, Toast does not directly deduct or remit sales tax.

Marketplace Facilitator

Toast will only file and remit taxes for sales where Toast is classified as a marketplace facilitator, which shifts the obligation to collect and remit tax from the merchant to the marketplace facilitator. 

For more information on marketplace facilitator laws and how they impact your business, see .

This content is for informational purposes and is not intended as legal, tax, HR, or any other professional advice. Please contact an attorney or other professional for advice.