Service Charges Explained

This will come as a surprise to some, however, the service charge found in a comprehensive proposal in the catering industry, is NOT a gratuity! Again, the service charge is not a gratuity.

The service charge is a fee (usually 18-22% nationally) that is added by the venue or catering company that covers operating cost for things such as insurance, advertising, admin staff, trucks maintenance, equipment replacement and various other costs involved in running the business.

We get asked all the time what a “service charge” is. Some caterers call it “coordination-administration”, some call it “event production fee.” The service fee is not a gratuity for staff. It covers all of the back end costs that go into the event aside from the food itself. We do not charge for tastings, meetings, CAD diagrams, insurance certificates, etc. This fee offsets all of these costs to insure our clients aren’t worrying about asking for help in these areas, as many of our clients have had, or heard of others’ experience in which they are billed for these things. We like to make the planning process is as easy as possible with nothing to worry about once you hire us to serve you."

In other words, the service charge helps cover the costs of doing business: office staff, utilities, office supplies, day to day operations, etc. So while a catering contract may show a break down of the event elements and their costs, the service charge helps cover the cost of the hours needed to prep and plan the event.

A tip for when you are planning a wedding and getting quotes. Ask for the all inclusive total that includes food & beverage, labor staff, tax, and service charge. Sometimes a venue or caterer will leave out the tax and service charge in order to hook you in to booking with them. When the bill comes to you, it’s 30% higher than you were originally budgeting for. This can be a painful lesson.