Liquor License 101 for Restaurants and Bars

If you’re starting up your own restaurant, bar, brewery, or event space and you plan on serving alcohol, you’re going to need a liquor license. It doesn’t matter the state where your business will be located: it’s always illegal to serve alcohol without a proper license.

But getting a liquor license can be difficult and time-consuming. And once you have one, you can lose it if you violate state guidelines, whether it’s over-serving your customers, serving minors, selling alcohol during restricted time frames, or disorderly conduct in your establishment. And now with Covid-19 in the picture, state liquor authorities are temporarily revoking liquor licenses from restaurants and bars violating mandated health and safety protocols related to the pandemic.

Here’s everything you need to know about getting a liquor license in 2020: what it is, how much it costs, and what to expect from the process.

What is a liquor license?

A liquor license makes it legal for your establishment to sell alcohol. Liquor licenses are issued by the state in which your business operates, as different states have different regulations relating to alcohol sales. Requiring restaurants and bars to obtain a liquor license makes it possible for the state and municipal government to enforce their alcohol policies.

What kind of liquor license do I need?

The type of license you need depends on how you sell or serve alcohol. The two primary “categories” are on-license and off-license.

On-license: This is for businesses that are selling or serving alcohol to be consumed on-premises. (Also called on-premise or on-sale licenses.) This is the type of license that a restaurant or bar needs to obtain.
Off-license: Specifically for businesses selling alcohol to be consumed elsewhere. Liquor stores, wine shops, and grocery and convenience stores are all examples of businesses that sell alcohol for “carry-out,” requiring an off-license.

There are several types of on-licenses that restaurants and bars may need to apply for, depending on the type of alcohol you’re serving and the manner in which you’re serving it. A few common examples:

Restaurant liquor license: This is generally known as the “all liquor license” because it allows a business to serve all types of alcohol
Beer and wine liquor license: Unlike the “all liquor license,” a beer and wine liquor license doesn’t permit you to sell stronger spirits.
Tavern liquor license: This is commonly used for restaurants that serve both food and alcohol but have at least 50% of sales generated solely from liquor.
Server license: Some jurisdictions require individual servers to apply for a server license in addition to a liquor license. Any staff serving alcohol of any kind must take a liquor class prior to getting this license, which educates them on the kinds of alcohol there is, the legal amounts in which to serve it according to the state, and DUI and DWI laws.

How much does a liquor license cost?

How much a liquor license costs depends on the state you’re operating in and the type of license you’re applying for. The range can be anywhere from $50 to more than $300,000. The average, however, is around $1,400.

Keep in mind that you might be expected to pay additional processing fees depending on your local regulations. Some states have Liquor License Quotas, which means that only a certain number of licenses can be in use at the same time, depending on the population of the area. If that’s the case, then a new liquor license can be more expensive due to limited supplies.

How do I apply for a liquor license?

Applying for and obtaining a liquor license is a bit of process. There are a number of steps you have to take (and hoops you have to jump through) not only to get your license, but to maintain it.

Know your state’s liquor laws

Before you can apply for a liquor license, you have to know what you’re applying for. Remember, there are different licenses available depending on what kind of establishment you’re opening: a restaurant, a tavern or bar, or a liquor store. Also be sure to brush up on any additional requirements your city or county may have in place. You can consult your local Alcohol Beverage Control (ABC) board for this information, or you can check with your state’s alcohol or liquor agency.

Get all of your business permits

Before you apply for your liquor license, check to see what kinds of permits you’ll need for your application. Here again, your local ABC board can be a great resource. Check their website to see which ones you’ll need. (Once you have them, keep all of the paperwork secure and on-hand, as you’ll most likely have to present it.)

Apply with your local ABC board

Once you’re familiar with your local laws and know the type of license you’ll need, then it’s time to apply with ABC board in your area. You can do so in person, or in some cases, you may be able to apply online.

Defend your proposal

You might need to defend your case as to why you want to sell alcohol in a public hearing if a member of your local community protests your application.

Renew your liquor license and permits

Applying for a liquor license isn’t just a one-time thing. Expect to renew your license and permits every one to three years. And keep in mind: if you’re found to be in violation of liquor laws, you could have your license suspended or revoked altogether.

How long does it take to get a liquor license?

Like we said: getting your liquor license is a process. In some cases, expect to wait weeks or even months for your application to be processed and approved. The standard waiting time to hear back from your local ABC board is up to six months. If you live in a state with quotas, it can take longer, as you’ll have to wait for another business to forfeit theirs (or you can try to buy one on the secondary market).

So if you know you want the option to sell or serve alcohol, our advice is apply for your license as soon as you can in your startup process.

Liquor licenses: worth the hassle?

Getting your liquor license requires a lot of patience and planning — and it can be a financial investment, too. Beyond obtaining the license itself, there are other costs that go into serving alcohol, like equipment, server training, building out a drink menu, etc.

For bars, obviously, getting a liquor license is a no-brainer; for other establishments, you’ve got to decide whether it’s worth the hassle on and cost on the front end as well as the effort to maintain it. Take into account your location, hours, menu, and customer base/demographic. For example, a family or kid-focused establishment may choose not to serve alcohol. The same goes for restaurants that operate only on weekdays, during regular business hours — like breakfast spots, or cafes and coffeehouses catering to working professionals.

But many customers expect alcohol as an option, especially if your restaurant operates on evenings and weekends, or if your menu lends itself to alcohol pairings. It’s also important to note that alcohol sales generally have higher margins than food sales, so financially speaking, a liquor license is often worth the up-front hassle.

Bottom line: before pursuing a liquor license, be sure that serving alcohol in your establishment is actually going to benefit your business. If you decide to move forward, don’t be intimidated by the process. Simply do your research on the front-end: determine the licenses you need, learn about the regulations that apply, and understand the associated costs and timeline.

(Need help staffing your bar? Read our tips for hiring a bar manager here!)

You might also be interested in

Product and Company News

2025 Roundup: Your Favorite New Tip Management Features

2025 was a defining year for Kickfin and the customers who rely on our software to automate their tip management processes

Driven by direct customer feedback and the evolving realities of restaurant operations, our Product Development team delivered a wave of meaningful enhancements across tip calculation, integrations, user controls, and accounting.

Before we look ahead to 2026, here’s a look back at the product advancements that made Kickfin more robust, more flexible, and more ready to meet the demands of restaurant teams than any other tipping solution.

Advanced Tip Calculator Enhancements

n 2025, we significantly expanded the functionality of Kickfin’s Tip Calculator. Here are a few standout features that we released:

Separate Tips and Auto-Gratuities

Kickfin now tracks tips and auto-gratuities separately, allowing operators to report them independently to payroll and manage them differently for tax purposes.

This distinction is especially important in light of the 2025 No Tax on Tips legislation. While tipped employees no longer pay federal income tax on the first $25,000 in tips earned annually, auto-gratuities, service fees, and other compulsory charges remain taxable.

Kickfin ensures those earnings are categorized correctly from the start — reducing downstream payroll and compliance risk.

House Accounts for Service Charges

Not all service charges are distributed 100% to employees — and Kickfin allows you to handle that with “House Accounts.”

Operators can retain a portion of service charges while distributing the remainder to the team. This is particularly valuable for:

Special events and private dining
Paying out job roles that don’t typically participate in tip pools (e.g., event managers)
Maintaining clarity and transparency around service charge allocation

More Flexible Tip Share Logic

No two restaurants share tips the same way — and Kickfin’s calculator now supports even more real-world scenarios.

Operators can configure tip shares:

By shift or by check close, ensuring support staff are compensated appropriately even if they didn’t touch a specific check
By hours worked or split evenly, a level of flexibility that remains unique to Kickfin
With advanced rules for “remaining tips,” allowing operators to define how servers and bartenders split earnings after support positions are paid out.

These enhancements allow Kickfin to support everything from simple pools to highly complex policies.

Check-Level Edits for Greater Accuracy

POS data doesn’t always capture every nuance, so managers may need the ability to make changes.

Kickfin now supports individual check-level edits for:

Cash tips
Auto-gratuities
Check details and splits

This ensures large parties, special events, and edge cases are handled accurately.

Tip Calculator Change Log for Auditability

Any check-level change made by a manager is recorded in a detailed change log. This creates a clear audit trail, helping operators resolve questions quickly and reinforcing transparency and trust with staff.

Enhanced Functionality for Smarter Cash Handling

Thousands of restaurants use Kickfin because they don’t have enough cash on hand to pay out credit card tips, and they want to reduce the amount of cash handling in their restaurant altogether.

However, we know cash will probably always be a (small) part of the equation. Kickfin makes it easy for you to handle that with some added functionality:

Tips left in cash: If a diner leaves a pile of cash at your table, it might not get recorded in your POS. However, Kickfin allows you to record it and distribute it through our platform.
Cash payouts: Many operators may want to distribute all of the cash left in their register at the end of a business day to avoid bank runs for deposits. Again, that’s easy to do with Kickfin’s “Blended Payouts” feature.

Enhanced Support for Toast Delivery Service Tips

Kickfin now handles Toast Delivery Service tips more intelligently by excluding driver tips from the general tip pool and assigning those tips directly to the delivery driver. This ensures tips are distributed exactly as intended.

Kickfin delivers on all of those fronts by:

Freeing managers up from bank runs and the back office, so they can focus on everything that can’t be automated.
Ensuring employees walk out the door with their earnings already in their existing bank account, no waiting, no detours.
Helping operators stay compliant, track everything, and uncover new efficiencies.

Expanded POS and Payroll Integrations

New POS Integrations

In 2025, we expanded our POS ecosystem with new integrations including Union POS and rPOWER. POS integrations eliminate manual uploads, reduce errors, and enable real-time tip calculation and reconciliation. Learn more about integrating your POS with Kickfin.

New Payroll Integrations

We also launched new payroll integrations with ADP Run, Paylocity, and Restaurant365 Payroll.

Once activated, Kickfin generates export files that sync seamlessly with your payroll system — significantly reducing manual work for payroll teams.

Looking Ahead

platform that keeps pace with the ever-changing complexity of modern hospitality operations.

If you’re not yet using Kickfin, now is the time to see what advanced tip management really looks like 👉 Schedule a demo today!

If you’re already a Kickfin customer, our team is happy to walk you through what’s new. 👉 Schedule a quick consult to learn more.

And of course: Stay tuned for what’s to come in 2026!

Product and Company News

Kickfin Named to Deloitte Technology Fast 500 List for Second Consecutive Year

Kickfin is proud to announce that we have once again been named to the 2025 Deloitte Technology Fast 500™, a ranking of the fastest-growing technology, media, telecommunications, life sciences, fintech, and energy tech companies in North America, now in its 31st year.

Kickfin is the only company on the list purpose-built for restaurants and bars to automate tip management — marking another major milestone for our team, our partners and the thousands of restaurant operators who trust us to modernize their tip-pooling and payout workflows.

Why it matters

When it comes to tipping out employees, cash is no longer king — and needs are changing fast. Hospitality workers demand (and deserve!) faster, cashless payouts; burned-out managers need more hours in their day; and now more than ever, operators care about visibility, compliance, and employee satisfaction.

Kickfin delivers on all of those fronts by:

Freeing managers up from bank runs and the back office, so they can focus on everything that can’t be automated.
Ensuring employees walk out the door with their earnings already in their existing bank account, no waiting, no detours.
Helping operators stay compliant, track everything, and uncover new efficiencies.

What sets Kickfin apart

There’s a reason Kickfin is the best-in-class tip management solution.

Broader POS integrations: We’ve expanded our direct integrations with leading POS brands, including Toast, Square, SkyTab, Genius POS, Union, and more — so managers can pool and pay out tips in a matter of clicks.
Enhanced tip-pool logic and flexibility: Our platform automates even the complex tip pool policies, with more tip pooling and automated reconciliation features than any other solution, while keeping the end-user experience simple and intuitive.
Instant, cashless payouts: With fewer cash drawer runs and real time bank deposits, teams experience faster shift-close, fewer errors and improved satisfaction.
Built-in compliance and reporting: As tip-pooling regulations continue to evolve, Kickfin empowers customers with robust features like digital paper trails and payroll integrations to ensure accuracy and compliance from end to end.
Customer success focus: Our fully U.S.-based Customer Success team is partners with customers to make onboarding fast and easy, no matter how tricky your tip policy may be, so you get ROI right away.

A big thank you

We’re honored to be recognized by Deloitte, and even more excited about what comes next. For restaurant operators, managers and employees alike, the future of tip management is here, and we’re thrilled to be your partner.

Ready to see what automated tip pooling and instant payouts look like in action? Book a demo today!

Product and Company News, Technology and Software

New Kickfin Feature Alert: Blended Payouts Are Here!

Brand new feature, coming in hot!

As part of our latest product release, Kickfin now offers Blended Payouts for even easier, fully automated tip management and reconciliation.

Why Blended Payouts Matter

Now more than ever, restaurant guests use credit cards or digital payment methods instead of cash. For many operators, that means there isn’t enough cash on hand at the end of a shift to pay out tips. But employees still want to receive their payouts immediately after clock-out.

As our customers know, Kickfin solves for those cash shortages by automating and digitizing the payout process — giving you the power to send instant, cashless payouts directly to your employees’ bank of choice, 24/7/365.

The result: minimal cash handling and risk, better accuracy and tracking — and of course, fewer bank runs.

However, digitizing payouts often results in some leftover cash in the drawer. Over time, we’ve heard from customers who prefer to use up that cash to pay out tips, then distribute the remaining tip amounts via Kickfin.

With Blended Payouts, you can do just that — and still account for every penny paid out, quickly and accurately, within the Kickfin platform.

How Blended Payouts Work

As always, all Kickfin customers can still choose to split individual payment amounts between instant payouts and payroll. Once you enable the new Cash Payouts feature, you will now be able to account for any cash tip payments that were also distributed.

Note: This feature lives within Kickfin’s Tip Calculator, which means you must have an active POS integration to use it.

Once it’s enabled, you’ll see the new “Cash Payouts” button on the Payment Review screen.
After clicking the button, users will be able to enter the individual cash amounts that were distributed to employees.
Back on the Review screen, you’ll see instant payout, payroll, and cash payment amounts for each employee. All three payment methods will have their own line items and be accounted for under your Payment Details.

Watch here for a full walkthrough of the new feature.

Ready to enable Blended Payouts?

If you’re a current customer, in touch with our Customer Success team at support@kickfin.com to activate this new feature.

(Not a customer yet? Click here to see Kickfin in action and learn how you can automate tip pooling and payouts!)

Product and Company News, Technology and Software

Kickfin Partners with Union POS to Automate Tip Distribution for High-Volume Bars and Restaurants

Kickfin is excited to share the latest addition to our integration marketplace. Read on for all the details around our partnership with Union POS. (If you’re a current Union POS customer and you’d like to learn more about how Kickfin automates tip pooling and payouts, schedule a live demo here.)

AUSTIN, Texas (August 13, 2025)—Kickfin, the leading tip management software, today announced the launch of its integration with Union, the purpose-built POS and engagement platform powering the nation’s busiest bars, nightclubs and restaurants.

Thousands of operators use Kickfin to eliminate tedious tip calculations and remove cash from the tip distribution process so managers can move faster, track everything, and ensure accuracy and compliance.

By activating the Kickfin-Union integration, we eliminated clunky spreadsheet formulas and fully automated our tip pooling process. After going live, we reduced our time to close out by an average of 30 minutes after every shift.

The Kickfin-Union integration gives Union’s customers the power to auto-calculate tip pools in a matter of clicks and send payouts directly to employees’ bank of choice—no cash or pay cards required.

“By integrating with Kickfin, we’re giving operators the power to choose best-in-class tools that work seamlessly with their Union POS and data,” said Alex Broeker, the CEO and founder of Union. “This direct integration brings automated tip management to our operators while unlocking new opportunities for operational efficiency, employee satisfaction and simplified compliance.”

KPG Hospitality, which operates experiential bars and unique concepts throughout Texas and Tennessee, was among the first operators to activate the Kickfin-Union POS integration.

“Our venues run at a very fast pace. When you consider the time it takes managers to manually calculate tip amounts every day, after every shift, across every location, it’s a lot of unnecessary admin hours,” said Troy Cramer, the managing partner at KPG. “By activating the Kickfin-Union integration, we eliminated clunky spreadsheet formulas and fully automated our tip pooling process. After going live, we reduced our time to close out by an average of 30 minutes after every shift.”Key Features of the Union + Kickfin Integration:

Automated Tip Pool Calculations: Calculate complex tip pools in seconds, saving managers hours of administrative work while ensuring accuracy and transparency.
Instant Cashless Payouts: Pay out tips directly to employees’ bank of choice instantly, eliminating the need for cash handling and bank runs.
Simplified Compliance: Maintain a digital record of every payout, making tip reporting and tax compliance straightforward.
Enhanced Tracking: Easily track tips by pay period with comprehensive reporting capabilities.
Streamlined Operations: Implement complex tip policies with just a few clicks through an extremely easy-to-use interface.

“Our integration with Union, a leading POS system built specifically to support the busiest venues in the industry, makes perfect sense,” said Kickfin co-CEO Brian Hassan. “Together, we’re creating a solution that saves time, reduces errors, and delivers a better experience for both operators and their staff.”

Available immediately through both Union and Kickfin, venues can integrate their systems and begin leveraging these capabilities today. To learn how this partnership can transform your tip management operations, schedule a demo at GetUnion.com or kickfin.com/demo.

About Union
Union powers a first-of-its-kind venue operating system purpose-built for the nation’s busiest bars and restaurants. More than a point-of-sale, Union connects 1,500+ establishments with 5M+ consumers and leading brands through real-time consumption data. The platform drives operational efficiency, enables frictionless mobile ordering, and facilitates brand-patron interactions that enhance venue loyalty. With $2B+ in annual transactions, Union creates a virtuous cycle where venues improve customer experiences, brands gain direct consumer engagement, and patrons enjoy personalized rewarding hospitality—transforming high-volume operations into next-gen guest experiences. To learn more about Union, visit http://www.getunion.com

About Kickfin
Kickfin is a leading digital tip management platform that automates tip pool calculations and delivers cashless tip payments directly to employees’ bank accounts. Designed to eliminate the administrative burden of tip management, Kickfin helps restaurants, bars, and hospitality venues save time, reduce errors, and improve employee satisfaction. With features like instant payments, digital record-keeping, and simplified compliance, Kickfin is transforming the way venues handle tip distribution in today’s increasingly cashless economy.