Catering invoice template for US caterers, with the tax lines right

The layout that keeps clients and auditors happy

Put your business name, address, phone and state sales tax permit number at the top, then the client, the billing contact and any purchase order number. Give the invoice a unique number and date, and repeat the event date and venue, because a company paying 40 catering invoices a year will match by event, not by your invoice number.

List food by per-person price times the final guaranteed count, not the number who showed up, unless your contract says otherwise. Bar, rentals, staffing hours, delivery and any room fee each get their own line. Below the lines sit the service charge, the gratuity if you use one, sales tax, the total, deposits already received, and the balance due with a due date.

• Business name, address and sales tax permit number
• Client, billing contact and PO number
• Unique invoice number and invoice date
• Event date, venue and final guaranteed count
• Line items with quantity, unit price and tax status
• Service charge and gratuity as separate lines
• Sales tax total, deposits applied and balance due

What your invoice must show in United States

A worked example from Texas, where the gratuity cap matters

The example on this page is a corporate lunch for 150 in Austin. Food ready to eat sold by a caterer is taxable in Texas, so every food and beverage line carries sales tax. The state rate is 6.25 percent and local jurisdictions can add up to 2 percent, for a maximum combined rate of 8.25 percent. We have assumed the address sits at that maximum. Check the Comptroller rate locator for your actual address.

The caterer adds an 18 percent gratuity, printed as "Gratuity", paid only to the servers and bartenders who worked the event. Under Texas rules a mandatory gratuity of 20 percent or less is not taxable when it is separately stated as a tip or gratuity and goes only to the employees who provide the service. Push it to 22 percent, or keep part of it for the house, and the whole gratuity becomes taxable.

Invoice: corporate lunch, Austin, Texas

Weekday corporate lunch for 150 guests at a client office in Austin, delivered, set up and served by the caterer

• Tax rate assumes an address at the Texas 8.25% combined maximum; confirm yours with the Comptroller.
• Gratuity is 18% of the food and beverage subtotal of $6,675.
• Balance due within 15 days of the event.

The same invoice in New York and California

Move the event to Manhattan and the rules shift. New York taxes service charges on catered events. A gratuity escapes tax only if it is shown separately, identified as a gratuity, and the business gives the entire amount to its employees. A line reading "Service charge 20%" is taxable at the 8.875 percent New York City combined rate, however you distribute it afterwards.

In California the test is whether the charge is mandatory. A mandatory tip, gratuity or service charge is part of taxable gross receipts even if you pay every dollar to staff. An optional tip that the customer writes in is not taxed. Caterers working across state lines should keep a separate invoice template per state rather than one template with a footnote.

Show deposits as payments, not discounts

A deposit collected at booking is a payment toward the invoice. Show it below the total as "Deposit received" with the date and receipt number, and never as a negative line item above the tax. Placing it above the tax line quietly reduces the taxable amount and understates the sales tax you owe.

If a client pays by card and you add a surcharge, check your state rules and card network rules before printing it. Several states limit or ban card surcharges, and a surcharge line on a catering invoice is one of the first things a consumer complaint cites.

Tax-exempt clients: get the certificate before you drop the tax

Schools, churches, some nonprofits and government agencies often ask for a catering invoice without sales tax. Whether they qualify is a state question, and the proof is the exemption certificate the client gives you, not their word on the phone. Keep a copy with the event file and print the certificate number on the invoice. If an auditor later decides the exemption did not apply, the missing tax is assessed against you, the seller, with interest.

One more wrinkle: in some states an organisation that is exempt when it buys supplies is still taxed when it buys prepared meals for a party. Check the specific rule for catered food before you assume an exemption covers the event.

The payroll side of the service charge

The IRS treats an automatic gratuity as a service charge rather than a tip. When you pay part of it to your servers, that money is wages. You withhold income tax and FICA through payroll and report it on the W-2, instead of the staff reporting it as tips. Keep a short record per event showing how the charge was split, so that the numbers on your invoices match the numbers in payroll.

Mistakes that trigger disputes or tax bills

Billing the count that attended when the contract says you bill the guarantee, or the reverse. Forgetting to add the overtime hour the client agreed to at 10.45 pm. Charging tax on a gratuity that was exempt, which the client notices, or failing to charge it on a service charge that was taxable, which the auditor notices. Sending the invoice three weeks late, after the client has mentally closed the event. Send it within two business days while the evening is still fresh.

Finally, keep the invoice number sequence unbroken. Voided invoices should stay in the log marked void, so that a gap never looks like a missing sale.

Invoice questions from United States