How to price catering: one 40-person order, costed

A catering order for 40 can look like your best night of December and still lose money. Price it from everything the order uses: the food at plate cost, the packaging, every staff hour at its true cost, the drive and any rentals, then add the margin you want and check the food cost. In the worked example below, a quote set from food cost alone comes out short before card fees, and the price that covers everything is 40% higher.

If holiday party orders are starting to come in, this post works one order line by line, with every table adding up. Copy the method, not the numbers.

One order, priced from food cost

Here is an example, made up so you can follow the sums. Linden Avenue Kitchen, an example full-service restaurant, gets a call: an office holiday party for 40 people, a hot buffet, delivered 30 miles away, set up, and kept tidy for three hours. Every name and number here is an example.

The owner starts with plate cost. Each dish has a costed recipe, and this is what one guest's share of the buffet costs to make.

The restaurant aims for food cost at 30% of the price, so the owner divides: $9.00 ÷ 0.30 = $30.00 a guest. That is $1,200 for one order, with the food cost right on target. It looks like a great night.

The trouble is that a catering order brings costs the dining room never has: pans and plates that leave the building, a van, hours of driving and setting up, staff at someone else's buffet. None of them is in the $9.00.

What the order really uses

Food, with a cushion. Guests serve themselves at a buffet, so exactly 40 portions can run out. Linden Avenue makes 4 extra, a 10% cushion from its own past orders: 44 × $9.00 = $396.00. You pay for the cushion, so it goes in the cost.

Packaging and disposables. Everything that leaves with the food and doesn't come back. Price each one from your own invoices.

Fifty sets for 40 guests, because some people take a second plate for dessert. That's $3.75 a guest the $30.00 quote never saw.

The van. Fuel, insurance and wear are real costs even with no bill for this one trip. If you don't track your own cost per mile, one stand-in is the IRS's business standard mileage rate, 76 cents a mile from July 1, 2026 (it was 72.5 cents from January 1 to June 30). The IRS sets it for working out a deduction for business driving, not as a measure of your van, so your own number may be higher or lower. Linden Avenue's round trip is 60 miles: 60 × $0.76 = $45.60.

Rentals. Linden Avenue owns its hotel pans but not enough chafing dishes, so it rents 4 at $15.00 and 2 tablecloths at $10.00 from a local rental company (example prices): $80.00.

Staff hours at their true cost

In the example this is the biggest line. List every hour the order takes, not just the cooking.

An hour costs more than the wage on the schedule. The Bureau of Labor Statistics' Employer Costs for Employee Compensation release for June 2026, published September 9, 2026, gives the national picture. Its Table 4 puts employer costs in accommodation and food services at $20.03 per hour worked, of which $16.18 is wages and $3.85 is benefits: about $1.24 of total cost for each $1.00 of wages.

Know what that figure is before you use it. BLS measures it per hour worked, it's an average of every job in the industry, hotels included, and its wages leave out tips, which BLS counts as payments from someone else. It's a starting point until you have your own figure, which our post on the true cost of an hour of labor shows how to work out from your payroll, taxes and insurance.

Three things change this line in December:

• Overtime. If the order's hours push a cook past 40 in the week, those hours cost more than the regular ones. BLS counts the overtime premium in benefits, not wages, so the 1.24 already holds an industry-average share of it; for your own cook, the labor hour post works an overtime hour out from your rates.
• Tipped staff. A server's hour is costed differently; the labor hour post shows how.
• Your own time. If you drive the van yourself, the table doesn't pay you. Price your hours in, or know the margin is paying you.

For staff cost as a share of sales across the month, use the labor cost calculator.

The full cost, and the price per guest

The quote doesn't cover the order's own costs. If the client pays by card at an example rate of 3%, another $36.00 comes off, so the order ends $43.28 short, and pays nothing toward rent or insurance. Staff hours are 44% of the costs and food only 33%: the owner priced from the smaller line.

Linden Avenue wants 25% of the price left after the order's own costs and card fees. That 25% is the example's own choice, not a benchmark, and so is its 30% food cost target. For the food cost targets RestaurantDoctorAI uses for each type of restaurant, which are our own and not industry figures, see the food cost guide.

You don't have to show it as one number. The same $1,680 can be $34.00 a guest plus a $320 delivery and setup charge, which tells the client what the service costs. How a charge is named can change how it's taxed, though, so read the next section before you split it.

The style of service moves the price as much as the menu does. If the office picks the food up instead, the drive, setup, buffet hours, van, rentals and fuel drop out.

For the pickup order the food cost target sets the price, leaving $460.24 after costs and a 3% card fee. Neither number is always the higher, so check both.

Hot, cold and the clock: food safety as a planning cost

Food that travels has to stay safe on the way and on the buffet, and that costs equipment and staff time. The rules come from your health department, and they build on the FDA's Food Code, which the FDA describes as a model that local, state and federal regulators use to write their own rules. The Code itself says it is neither federal law nor federal regulation, and that every state has adopted some edition of it or the model codes before it. The newest full edition is 2026, so ask your health department which version it follows.

In both the 2022 Food Code and the 2026 Food Code, section 3-501.16 and section 3-501.19 say the same thing on these points:

• Hot holding: food that needs temperature control for safety is kept at 135°F (57°C) or above, with an exception for some roasts.
• Cold holding: at 41°F (5°C) or below.
• Time instead of temperature, up to 4 hours: the food starts, in most cases, at 41°F or below or 135°F or above, is marked with the time 4 hours after it leaves temperature control, and is served or thrown away by then.
• Time for cold food, up to 6 hours: the food starts at 41°F or below, never goes above 70°F (21°C), is checked and marked, and is served or thrown away within 6 hours.

Either way, written procedures have to be prepared in advance and kept on hand for the health department.

For the price, that means chafing dishes and fuel, insulated carriers, cold packs, a probe thermometer, and someone who checks temperatures. If you plan to use time instead of temperature, the clock starts when the food leaves hot or cold holding, so if it travels without heat, the drive and the setup count. In the example, a 45-minute drive, an hour of setup and a three-hour party add up to more than 4 hours, so the plan has to keep the food hot all the way, not rely on the clock. Food thrown away at the end is a cost too, which is one more reason the cushion sits in the food line.

Sales tax, service charges and deposits

Sales tax on catering differs by state, and so does the tax on what you add to the bill. Delivery fees, setup charges and service charges can be taxable in some states and not in others. One example, California, as its tax agency publishes it:

• Regulation 1603 says tax applies to the entire charge a caterer makes for serving meals, food and drinks, including the use of dishes, silverware, glasses, chairs and tables. It also says an optional tip isn't taxed, but a mandatory tip, gratuity or service charge is part of taxable gross receipts.
• Regulation 1628 taxes charges for delivery to the buyer unless several conditions are met, one of them that the charge is stated separately.

That's one state, shown as an example. Your state's tax agency publishes its own rules, and your accountant can say how they apply to your invoice. A service charge can also change your payroll and your staff's tips: our guide to restaurant service charges covers what it changes and how to tell guests.

Deposits and cancellations are business terms, not tax rules, and they're easier to hold to in writing. A catering order is food bought and hours scheduled days before you're paid. Write down, in the quote the client accepts:

• The deposit, how much and by when. One way to set it: enough to cover the food you'll buy.
• The final guest count and the date it's due, and that you bill for that count even if fewer people come.
• What happens if the client cancels: by which date the deposit comes back, and after which date it doesn't.
• What the price includes (delivery, setup, service hours, rentals), and when the rest is paid.

This is a list of terms to decide and write down, not legal advice. Agree them before you buy the food, so nobody is surprised later.

This week

1. 01Cost your catering menu per guest in the plate cost calculator, as a batch with the number of portions it makes, cushion included.
2. 02Price your disposables from your last invoices: pans and lids, plate sets, cups, utensils, fuel. Write the cost per guest.
3. 03List every hour one past order took, from the first call to the last pan put away, and price it at your cost per hour, not the wage.
4. 04Measure the round trip to a typical client and price it at your own cost per mile, or the IRS rate as a stand-in.
5. 05Work your next quote both ways, from food cost and from all costs, and quote the higher.
6. 06Look up your state tax agency's page on catering and delivery charges, ask your health department which Food Code it follows, and write your deposit and cancellation terms into the quote.