If your restaurant sells through delivery apps in New York City, a set of worker-protection rules that took effect in early 2026 quietly rewrote the paperwork behind every order: a $22.13-an-hour minimum for couriers, tips prompted before checkout, weekly payouts with itemized statements, and real enforcement with multi-million-dollar consequences. None of that money is yours to keep — but all of it flows through your books, your bank deposits, and your tax forms.
Get the bookkeeping wrong and you will overstate revenue, understate fees, mishandle tips, and walk into tax season with a 1099-K that matches nothing in your ledger. Here is what the law requires, where it touches your numbers, and how to set up your chart of accounts so every delivery dollar lands in the right place.
The $22.13-an-hour floor — and why it shows up on your P&L
New York City guarantees app-based food and grocery delivery workers a minimum hourly rate, not including tips. For pay periods beginning on or after April 1, 2026, that rate is $22.13 per hour, up from $21.44 — a 3.2% inflation adjustment. The city's Department of Consumer and Worker Protection (DCWP) announces the adjusted rate on or before February 1 each year, and it rises every April 1.
You do not pay couriers directly, so why should you care? Three reasons:
- Platforms pass the cost through. Higher mandated courier pay is one reason commission and service-fee line items keep creeping. When your per-order economics change, you need fee lines recorded separately — not buried in net deposits — to see it happening.
- Your menu pricing math changes. A delivery channel that was profitable at one fee load may not be at another. You can only reprice confidently if your books show gross delivery sales, platform commissions, and net payout as three distinct numbers.
- Enforcement is active, not theoretical. The city analyzes monthly reporting from the apps, and it has already announced a settlement worth more than $5 million with three major delivery platforms over minimum-pay violations — including restitution to tens of thousands of workers and reinstatement of thousands of deactivated accounts. When regulators audit platforms, the paper trail runs through merchant payouts too. Clean records keep you out of someone else's dispute.
Action item: each April, check DCWP's announced rate and re-run your delivery-channel margin. If the pay floor rose, assume your fee load will follow within a quarter or two.
Tip transparency: the 10% checkout prompt and the pass-through rule
The January 2026 protections reversed a quiet industry shift that had moved tipping to after delivery. Now apps operating in the city must:
- Offer customers the option to tip before or at the time of checkout,
- Show a suggested minimum tip of 10%, and
- Disclose each worker's compensation per trip, including pay and tips.
For your bookkeeping, the critical principle is that tips are pass-through funds, never revenue. A customer's tip travels from the diner through the platform to the courier. It is not your sale, not your income, and not your expense. Businesses get into trouble two ways here:
- Booking gross payouts as revenue. If a weekly platform deposit includes customer tips that were forwarded to couriers, recording the whole deposit as sales overstates your revenue — and overstates the income on which you may owe tax.
- Netting tips against fees. Tips in, tips out. They should wash through a clearing or payable account at exactly zero net effect, fully visible, never offset against commission expense.
Action item: create a dedicated Tips Payable — Platform Pass-Through liability account. Every payout statement's tip line gets booked in and out of it. At month-end the balance should be zero (or only the current week's unsettled amount). If it is not, you have a reconciliation problem, not a revenue problem.
Weekly payouts, no-fee payment, and itemized statements
The 2026 rules require platforms to pay delivery workers at least weekly, with no fees charged for the payment mechanism, and to furnish written pay statements itemizing gross and net compensation plus every permissible deduction — no later than seven days after the end of the pay period.
The same discipline should govern your side of the relationship. Platform payouts to restaurants typically arrive on their own cadence, net of a half-dozen adjustments. Treat every payout like a mini–month-end close:
- Start from gross. Record gross food-and-beverage sales at full menu value, exactly as the customer paid before platform adjustments.
- Book each deduction on its own line. Delivery commission, service fees, payment-processing fees, marketing placements, refunds, and chargebacks each get their own expense or contra-revenue account.
- Land on the deposit. Gross minus itemized deductions must equal the bank deposit to the cent. If it does not, the difference sits in a suspense or clearing account until identified — never plugged into revenue.
- Keep the statement. Download and archive every platform payout statement with your month's records. They are the supporting documents for your fee deductions and your 1099-K reconciliation.
Restaurants that only record the net deposit consistently understate both revenue and expenses. That flatters food-cost percentages, distorts channel comparisons (is delivery actually profitable, or does it just look that way?), and creates a mismatch with the gross figure the platform reports to the IRS.
Deactivation protections: what courier job security means for your operations
The newest piece of the framework limits so-called unfair deactivations — platforms cutting workers off without justification. Under the city's rules, a delivery service must have a valid reason to deactivate a courier, provide notice and a written explanation, and offer a path to challenge the decision through an informal resolution process or DCWP review. Deactivations for bona fide economic reasons carry long advance-notice requirements, and remedies include reinstatement plus lost earnings.
This is worker-side law, but it has two practical consequences for merchants:
- Courier availability is stickier — and disputes are slower. A courier mid-dispute may be off the platform for weeks. If your Friday-night volume depends on fast courier acceptance times, diversify across more than one platform rather than single-sourcing delivery.
- If you employ your own delivery staff, the contrast matters. Your W-2 drivers live under standard wage, overtime, and recordkeeping rules — time records, pay stubs, workers' compensation. The city's message across both systems is the same: document pay contemporaneously or lose the argument later. Keep employee delivery wages, mileage reimbursements, and workers' comp premiums in accounts strictly separate from anything platform-related, so a platform dispute or audit never tangles with your payroll books.
The fee caps that still frame your margins
Separate from the worker-pay rules, the city's long-standing third-party delivery laws cap what apps can charge restaurants: 15% of the order for delivery and 5% for other services, excluding payment-processing (transaction) fees. Those caps are permanent, though the exact regulatory posture has been litigated and revisited — verify the current status on DCWP's fee-caps page before you dispute a charge.
What matters for your ledger is that every fee the platform charges you should map to one of three buckets: capped delivery commission, capped service fees, or uncapped pass-through processing. When a statement shows a blended "service fee" above the expected percentage, break it out and ask the platform's merchant support for an itemization. Overcharges you never identify are margin you never recover.
Set up your chart of accounts before the next payout
Here is a minimal account structure that handles everything above. Adapt the names to your existing books, but keep the separations:
- Revenue
- Dine-In Sales
- Marketplace Delivery Sales (gross, full menu value)
- Direct Online / Phone Orders
- Contra-revenue
- Platform Refunds and Credits
- Chargebacks
- Cost of delivery channel (operating expenses, one line each)
- Platform Delivery Commissions
- Platform Service and Marketing Fees
- Payment Processing Fees — Platform Orders
- Liabilities
- Tips Payable — Platform Pass-Through
- Platform Payout Clearing (gross recorded here until the deposit lands)
The monthly routine is mechanical: record gross sales to Marketplace Delivery Sales with the offset in Platform Payout Clearing; book each fee line as an expense against the clearing account; move tips through Tips Payable; when the bank deposit arrives, clear it against the clearing account. Clearing ends at zero. Tips Payable ends at zero. Anything left over is a defined, dated, assigned task — not a mystery.
For a walkthrough of structuring these accounts in a plain-text ledger, see the docs. If you want a visual check that each channel earns its keep, pipe the same data into a dashboard like Fava and compare dine-in, direct online, and marketplace margins side by side each month.
Reconciling the 1099-K: the January surprise to prevent now
Platforms report your gross marketplace sales on Form 1099-K — before commissions, before refunds, before adjustments. Your bank statements show net deposits. The gap between those two numbers routinely panics restaurant owners every January, and it is also the first thing an examiner asks about.
With the account structure above, the reconciliation writes itself:
1099-K gross = Marketplace Delivery Sales − Platform Refunds and Credits − Chargebacks (as reported on statements)
Build that reconciliation in December, not April. Pull each platform's annual summary, tie it to your gross sales account, list every fee and refund category that bridges gross to deposits, and file the workpaper with your tax records. If a platform's 1099-K includes sales tax it collected and remitted on your behalf — common with marketplace-facilitator rules — document that too, so you do not pay income tax on tax money or double-remit sales tax the platform already handled.
Common mistakes to stop making this week
- Recording net deposits as revenue. Understates sales and expenses, corrupts every ratio, mismatches the 1099-K.
- Treating tips as sales or ignoring them. Tips must pass through a liability account at net zero, visibly.
- Lumping all platform fees into one line. You cannot dispute a 15%-cap violation or renegotiate marketing spend you cannot see.
- Skipping the weekly tie-out. Small unexplained gaps compound into unfixable year-end plugs. Reconcile every payout within days, while statements and support tickets are fresh.
- Mixing W-2 driver costs with platform costs. Payroll, mileage, and workers' comp for your own couriers belong in labor accounts — never netted against marketplace payouts.
Simplify Your Financial Management
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