A catering enquiry rarely comes with thinking time. The event is in six weeks, it is for 60 people, and a number is expected by Friday. The fastest route to that number is also the most expensive one: take the three courses off the menu, times 60. That calculation does not add up in most cases, and you only find out after the event. This article works through a complete job and settles the question that most money hangs on in catering, namely which VAT rate applies. How the food cost per portion is worked out in the first place is in the article calculating the food cost percentage.
How do you cost a catering job?
From the bottom up, not from the menu. Five blocks make up the price:
- Food cost per person and course, times the guest count, plus a buffer against running out.
- Staff hours for preparation, service on site and set-up and clear-down, at a fully loaded hourly rate.
- Transport and equipment: vehicle, rented tableware, linen, consumables.
- A markup for risk and profit on the sum of the three blocks.
- VAT, at the rate that matches the supply actually made.
The difference from costing a single dish sits in blocks 2 and 3. On the menu, staff and fixed costs sit inside the markup factor, because they spread across hundreds of plates. A catering job has its own hours and its own equipment, and both are incurred regardless of how the restaurant is otherwise running. That is why they are calculated separately here.
Why does menu price times guest count not hold?
Because a job off the premises brings a block of costs the menu price was never built to carry. The example: a company event, 60 people, three courses, delivered and served on site.
On the menu those same courses would be CHF 12.00, CHF 34.00 and CHF 9.00, together CHF 55.00 gross per person.
Menu calculation: 60 × CHF 55.00 = CHF 3,300.00 gross net at 8.1% VAT: CHF 3,300.00 ÷ 1.081 = CHF 3,052.73
The job itself costs CHF 3,382.00 as calculated (the full working is in the next two sections). So the menu calculation comes out CHF 329.27 below it, and that is before a single centime of markup for risk or profit.
One qualification on that comparison: the hourly rate inside the CHF 3,382.00 is a fully loaded rate and already contains a share of the business’s fixed costs. So the shortfall does not mean the job burns cash. It means the job does not carry its share of rent, administration and depreciation, and that every hour spent on it would have earned more on the premises.
What makes the difference is four items that do not exist in your own function room: travel, rented tableware, set-up and clear-down, and the buffer you produce so that nothing runs out. The reverse holds just as well: if the event takes place on your own premises, with your own tableware, your own staff and no transport, several of those blocks fall away, and the menu calculation comes close to a viable price again. The mistake is not the menu. The mistake is applying it unchecked to a job that happens off the premises.
How do you calculate the food cost for a catering job?
Per person and per course, then times the guest count. It is calculated exactly as it is on the menu, so including sides, sauces, garnishes and sub-recipes; the method is in the food cost article.
| Course | Food cost per person |
|---|---|
| Starter | CHF 3.20 |
| Main course | CHF 9.40 |
| Dessert | CHF 2.40 |
| Total | CHF 15.00 |
Then comes an item that does not exist in per-dish costing: the buffer. At an event you do not cook to order and top up. It has to be enough, so you produce more than the arithmetic requires, and some of it is left over. Anyone who leaves that quantity out finds it again later, as the gap between calculated and actual food cost.
With an 8% buffer: CHF 15.00 × 1.08 = CHF 16.20 per person Food cost for the job: 60 × CHF 16.20 = CHF 972.00
The 8 percent is an example figure, not an industry number. How large the buffer has to be depends on the format: plated service with a fixed number of portions needs little, an open buffet considerably more. Anyone with a few events behind them knows their own figure from comparing calculated against actual consumption. That is the only figure that counts.
How do staff, transport and equipment get into the price?
As their own line items, in hours and in francs. First the hours, and all of them, not just the ones in the kitchen:
| Item | Hours |
|---|---|
| Kitchen preparation | 14 |
| Service on site (3 people × 5 h) | 15 |
| Transport, set-up and clear-down | 6 |
| Total | 35 |
35 h × CHF 52.00 = CHF 1,820.00
The hourly rate of CHF 52.00 is an example figure. Every business works out its own, and as a fully loaded rate: gross wage plus social security contributions plus a share of the fixed costs. Anyone costing with the bare hourly wage understates this block by considerably more than a third.
Then transport and equipment, again as example figures:
| Item | Amount |
|---|---|
| Vehicle, two trips | CHF 120.00 |
| Rented tableware, glassware, linen | CHF 380.00 |
| Consumables | CHF 90.00 |
| Total | CHF 590.00 |
That gives the calculated job costs:
Food cost CHF 972.00 + staff CHF 1,820.00 + equipment CHF 590.00 = CHF 3,382.00
On top of that sum comes the markup for risk and profit. Risk is not a figure of speech in catering: guests cancel, an event runs two hours long, the weather pushes the apéro indoors. In the example 15 percent, which is again a figure every business sets for itself.
Markup: CHF 3,382.00 × 0.15 = CHF 507.30 Net price: CHF 3,382.00 + CHF 507.30 = CHF 3,889.30 Per person net: CHF 3,889.30 ÷ 60 = CHF 64.82 Gross at 8.1% VAT: CHF 3,889.30 × 1.081 = CHF 4,204.33, so CHF 70.07 per person
Rounding works as it does for a menu price, with a cross-check (the method is in the article pricing a dish). At CHF 70.00 per person gross that gives CHF 4,200.00 for the job, CHF 3,885.29 net. CHF 503.29 is left above the calculated job costs, and the food cost of the job comes out at 972.00 ÷ 3,885.29 = 25.0%.
That percentage is incidentally a good example of why it decides nothing on its own: it looks better than on the menu, because the food cost is small relative to staff and equipment. What gets paid in the end are the 35 hours, not the ratio (more on that).
Which VAT rate applies to catering?
It depends on whether you serve, and the difference is larger than the margin on some jobs. What governs is Art. 25 para. 3 of the Swiss VAT Act: “For foodstuffs that form part of restaurant supplies, the standard rate applies.”
What counts as a restaurant supply is set out in the same paragraph: “A restaurant supply is the serving of foodstuffs provided the taxable person prepares or serves the foodstuffs on the customer’s premises or the taxable person maintains special installations for their consumption on the spot.” That applies to the example job, so 8.1%.
If food is only delivered, the reduced rate of 2.6% applies, “provided suitable organisational measures are taken to differentiate these supplies from restaurant supplies; if this is not the case, the standard rate applies” (Art. 25 para. 3 VAT Act). Such a measure is, under Art. 56 of the VAT Ordinance, “in particular the issue of receipts that indicate whether a restaurant supply, a delivery of food or a supply of goods for takeaway was provided”.
The line runs sharper than many assume. The VAT Ordinance lists both sides item by item:
- Delivery is “the supply of food by the taxable person to customers at their homes or to another place designated by them without further preparation or service” (Art. 55 para. 1 VAT Ordinance).
- Food service is “in particular the arrangement of food on plates, the setting up of cold or warm buffets, the pouring of drinks, the laying and clearing of tables, the serving of the guests, the management or supervision of the serving staff and the operation and provisioning of self-service buffets” (Art. 53 para. 2 VAT Ordinance).
- Preparation is “the cooking, heating, mixing, preparation and blending of food”; expressly not part of it is “the mere maintaining of the temperature of food ready for consumption” (Art. 53 para. 1 VAT Ordinance).
In practice that means: anyone who delivers hot food in thermal boxes, sets it down and drives off is delivering. Anyone who sets the same food out on the buffet is making a food service, and the whole job runs at the standard rate. On the example job that is CHF 4,204.33 against CHF 3,990.42, a difference of CHF 213.91 on identical food.
Two points that often get lost here. First, alcoholic beverages are excluded from the reduced rate and are always taxed at the standard rate, including on pure delivery. Second, and more important: what governs is the supply actually made, not what the quote says. The rate follows the event, not the wording. The full mechanics of the two rates are in the article pricing a dish.
This section explains costing and is not tax advice; what is authoritative is the VAT Act, the VAT Ordinance and guidance from the Federal Tax Administration (FTA). English is not an official Swiss language: the English texts of the Act and the Ordinance on fedlex are translations for information only and have no legal force; the German, French and Italian versions are binding.
What belongs in the quote so it holds?
Everything that can still change between acceptance and the event. A catering quote is not a price list, it is the description of a job that takes place weeks or months later.
- Guaranteed guest count and cut-off date. The price applies from a minimum number, and the final number is confirmed by a given date. Without a floor the business pays the difference when 60 guests become 45. The food cost drops with them, the 35 hours and the rented tableware do not.
- What is included and what is not. Tableware, linen, drinks, staff until what time, clear-down, waste disposal. Every item missing here gets discussed at the event itself.
- Tiered cancellation schedule. Tiered by notice period, because with a late cancellation the food is already bought.
- Validity period and price reservation. For an event booked half a year ahead, the purchase prices on the day are not the ones in the quote.
- Overtime. With an hourly rate, so that the two extra hours do not become a question of goodwill.
- VAT shown separately, with the rate and the type of supply, matching the section above.
These are commercial points, not legal advice. How the terms should be worded in an individual case is for the business to settle with its own advisers.
How do you keep costing current across many quotes?
Only if the recipe base is right and follows the purchase prices, otherwise every new quote works off the costs of the last one. This is exactly where catering gets laborious: every enquiry is the same recipe base at a new quantity and a new date. 60 people instead of 4 portions, six weeks later, and in between the supplier has adjusted prices. Anyone maintaining that in a spreadsheet copies the last version for each enquiry and carries the errors along.
For simply converting portion quantities to the guest count our free recipe scaler is enough.
For the rest, that is exactly what we are building Trolevo for: recipes with nested sub-recipes whose food cost rolls up automatically into one amount per portion, scalable to any guest count, along with the food cost at the price you have set. Change a purchase price and you see which recipes and which dishes are affected. This helps keep the costing current; the pricing and job decisions stay with the business. Trolevo is in development – get early access.
Sources
- VAT Act – Federal Act on Value Added Tax, SR 641.20, Art. 25 (German original; the English text is a translation for information only and has no legal force)
- VAT Ordinance, SR 641.201, Art. 53, 55 and 56 (German original; the English text is a translation for information only and has no legal force)
- FTA – VAT rates (standard rate 8.1%, reduced rate 2.6%)
The figures in the examples are illustrative and not an industry statistic. This article explains costing and is not tax advice.