SST and service charge on restaurant bills: rates and how to calculate them
Service tax on food and drinks in Malaysian restaurants and cafés is 6%, charged by F&B operators whose taxable turnover is above RM1.5 million in 12 months. Alcohol, tobacco and vape products are taxed at 8%. Service tax is calculated on the price of the food and drinks, not on the service charge, and the service charge itself is not subject to service tax. Beauty and salon services are not taxable services.
Checked on 25 October 2026 against the Royal Malaysian Customs Department (RMCD) F&B service tax guide and MySST FAQ. Confirm your own position with your tax agent.
Service tax rates in an F&B outlet
When the general service tax rate rose to 8% on 1 March 2024, F&B stayed at 6%. The SST expansion of 1 July 2025 and Budget 2027 did not change it. Within an outlet, the rates are:
| What is sold | Service tax |
|---|---|
| Food and non-alcoholic drinks | 6% |
| Alcoholic drinks | 8% |
| Tobacco and vape products | 8% |
| Event management services | 8% |
Who must register
- F&B operators, including restaurants, cafés, food court operators and caterers, must register when taxable turnover exceeds RM1.5 million in 12 months.
- Below the threshold, you do not charge service tax.
- Registered businesses must issue invoices or receipts for taxable services, in Bahasa Malaysia or English, on paper or electronically.
How to calculate a bill with service tax and service charge
RMCD's position is that service tax is calculated on the price excluding the service charge, and the service charge is not subject to service tax. Example for a registered restaurant:
| Line | Amount |
|---|---|
| Food and drinks | RM50.00 |
| Service tax 6% (on RM50.00) | RM3.00 |
| Service charge 10% (on RM50.00) | RM5.00 |
| Total | RM58.00 |
Is the 10% service charge regulated?
No law sets a service charge rate. In 2015 the authorities allowed hotels and restaurants to continue charging one where there is a collective agreement with staff and the charge is clearly displayed at the premises. If you charge one, show it clearly on menus and at the entrance, and apply it consistently by order type, for example dine-in only.
Do salons and beauty businesses charge SST?
Beauty services such as hairdressing, barbers, manicures, pedicures and facials were proposed as taxable services in June 2025, but the government dropped them before the 1 July 2025 start. They are treated as not taxable.
How KEDAI handles this
KEDAI applies SST and service charge per order type (for example dine-in versus takeaway) on every bill, across the POS, online store, app and table QR, and handles LHDN e-invoice in the same system.
Malaysia Compliance
LHDN e-invoice self-claimed by customers, unclaimed orders rolled into the monthly submission, SST and service charge per order type, and shopping mall POS integration.
Point of Sale
KEDAI POS keeps the queue moving: works fully offline, member lookup by phone, kitchen tickets, daypart menus, table view and dine-in QR — SST included.
Sources
- RMCD Panduan Industri Makanan & Minuman (F&B guide) V7 (19 Apr 2024)
- MySST service tax FAQ (current)
- KPMG: Budget 2027 tax measures (Oct 2026)
- The Edge: beauty services dropped from SST expansion (27 Jun 2025)
Questions answered
Is SST on restaurant food 6% or 8%?
It is 6%. The 8% rate applies to most other taxable services, but food and non-alcoholic drinks in F&B outlets stayed at 6%. Alcohol, tobacco and vape products in an outlet are taxed at 8%.
Is service tax charged on the service charge?
No. Service tax is calculated on the food and drink price excluding the service charge, and the service charge is not subject to service tax.
When does a restaurant need to register for SST?
When its taxable turnover exceeds RM1.5 million in a 12-month period.