Delivery apps such as Talabat, Deliveroo, Careem and Noon Food can add a lot of orders. But each order arrives with a commission, fees and packaging cost attached, and if those are not tracked properly the extra sales can hide shrinking profit.
What a delivery order really earns
Commission rates and fee structures differ between platforms, contracts and promotions, so always use the numbers in your own agreement. The example below uses a hypothetical commission of 25% of the order value purely to show the method.
Worked example: one AED 50 order
Same dish, same price including VAT, sold in the dining room and through an app. Food cost is assumed at 30% of net sales.
| Per order | Dine-in | Delivery |
|---|
| Customer pays (incl. VAT) | 50.00 | 50.00 |
| Less VAT (5/105) | -2.38 | -2.38 |
| Net sales | 47.62 | 47.62 |
| Food cost (30%) | -14.29 | -14.29 |
| Packaging | 0.00 | -2.00 |
| Commission (hypothetical 25% of 50) | 0.00 | -12.50 |
| Contribution in AED | 33.33 | 18.83 |
The delivery order contributes about AED 14.50 less, a drop of roughly 44%, before rent, salaries or any restaurant-funded discount. At 1,500 delivery orders a month, that is around AED 21,750 less contribution than the same sales would earn in the dining room.
This assumes the platform's VAT on its commission is recovered through your VAT return. If you are not VAT-registered, that VAT becomes an extra cost.
The costs that hide in platform statements
- Commission on each order, sometimes at different rates for different services.
- Marketing and promotion fees, including sponsored listings and discounts you agreed to fund.
- Refunds and cancellations charged back to the restaurant.
- Adjustments for missing items or customer complaints.
- Payment or service fees where your contract includes them.
When only the net payout reaches the accounts as "sales", all of these costs disappear into a smaller revenue figure. Food cost percentage then looks worse, delivery looks more profitable than it is, and VAT may be declared on the wrong amount.
How to reconcile platform statements
- Match orders. Compare the order count and gross value in your POS with the platform statement for the same dates.
- Check the commission rate. Recalculate commission on a sample of orders using your contract terms.
- List every deduction. Marketing, refunds, adjustments and fees should each have their own line in your accounts.
- Collect the tax invoice for commission and fees so you can support any input VAT claim.
- Match the payout to the bank. The amount received should equal the statement payout.
Example: a monthly statement check
| Line | AED |
|---|
| Gross order value per statement | 60,000 |
| Commission | -15,000 |
| VAT on commission | -750 |
| Sponsored listing fees | -2,000 |
| Refunds charged back | -800 |
| Expected payout | 41,450 |
In the accounts this becomes AED 60,000 of sales, AED 17,800 of channel costs, AED 750 of input VAT and AED 41,450 received from the platform. Any gap against the bank needs an explanation.
Protecting delivery profit
- Calculate contribution per order for each platform, every month.
- Use delivery-specific prices or menus where your agreement allows.
- Review promotions you fund, and check whether commission is charged before or after the discount.
- Track refunds by reason to reduce avoidable errors.
Key takeaways
- A delivery order can earn far less than the same dine-in order.
- Record gross sales and commission separately.
- Reconcile POS, statement and bank for every platform.
- Keep commission tax invoices for input VAT.
- Use your own contract rates, not assumptions.
Frequently asked questions
Should delivery sales be recorded gross or net of commission?
Record the gross sale and the commission separately. Recording only the net payout hides the true cost of the channel, makes food cost percentage look worse than it is, and can lead to VAT being declared on the wrong amount.
Should I set higher menu prices on delivery apps?
Many restaurants use separate delivery prices to cover commission and packaging, where their platform agreement allows it. Calculate the contribution per order at your actual commission rate before deciding, and review it whenever your terms change.
How often should platform statements be reconciled?
Reconcile every settlement statement when it arrives, and complete a full monthly reconciliation of POS orders, statement lines and bank receipts for each platform before closing the month.
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This article is general guidance for UAE F&B businesses, not tax or legal advice. Platform terms and VAT treatment vary; check your contract and speak to a qualified adviser.