Monthly corporate catering contracts can be a stable income source, but your margin determines whether you make money on them. Many caterers charge too little for the fixed costs and service that come with such a contract. In this article, you'll learn step-by-step how to calculate a profitable margin on monthly contracts.
What makes corporate catering different?
With corporate catering, you're dealing with different cost items than with events. You deliver structurally, often daily, which gives lower costs per person. But you also have fixed costs like transportation, staff, and administration that you need to pass on.
The cost structure of a monthly contract
A monthly contract consists of different cost items that you all need to include:
- Food costs: Ingredients for all meals
- Packaging costs: Containers, cutlery, napkins
- Labor costs: Preparation, delivery, service
- Transportation costs: Fuel, wear and tear, time
- Administration: Invoicing, planning, communication
- Unforeseen costs: Extra portions, changes
💡 Example:
Monthly contract for 50 people, 22 working days, lunch at €8.50 excl. VAT:
- Food costs: €2.80 per person (33% food cost)
- Packaging: €0.40 per person
- Labor: €1.20 per person
- Transportation: €0.30 per person
- Administration: €0.20 per person
- Unforeseen: €0.30 per person
Total cost price: €5.20 per person
Calculate your minimum selling price
Once you know what it costs, you can calculate your minimum selling price. For a healthy margin in catering, you typically work with 35-45% total costs of your selling price.
💡 Calculation:
Cost price: €5.20 per person
Desired cost percentage: 40%
Minimum selling price: €5.20 / 0.40 = €13.00 excl. VAT
Margin per person: €13.00 - €5.20 = €7.80
Factors that affect your margin
With monthly contracts, different factors come into play than with individual events:
- Volume: More people = lower costs per person
- Contract duration: Longer contracts = lower administration costs
- Distance: Further travel = higher transportation costs
- Service level: On-site service costs extra
- Menu complexity: Simpler menu = lower preparation costs
⚠️ Note:
Always factor in 10-15% extra portions in your cost price. With corporate catering, more people often show up than indicated, and you can't arrive with too little food.
Monthly check of your margin
A contract runs for months, but your costs can change. So check monthly:
- Have your ingredient prices gone up?
- Does the number of portions match your estimate?
- Are transportation costs higher due to traffic or detours?
- How much time are you spending on this contract?
💡 Practical example:
Contract at €13.00 per person, 50 people, 22 days:
Monthly revenue: €14,300 excl. VAT
Actual costs: €6,200
Margin: €8,100 (57% profit margin)
When a contract is no longer profitable
Sometimes you need to adjust a contract or even terminate it. Signs that your margin is under pressure:
- Your cost percentage rises above 50%
- You're spending more time than calculated
- Ingredient prices have risen structurally
- The client constantly asks for extras without additional charge
A system like KitchenNmbrs helps you track the actual costs and margins per contract, so you can adjust in time.
How do you calculate the margin on a monthly contract? (step by step)
Calculate all cost items per person
Add up: food costs, packaging, labor, transportation, administration, and 10-15% unforeseen costs. This gives you the actual cost price per person per meal.
Determine your desired cost percentage
For healthy catering, this is between 35-45% of your selling price. At 40% cost percentage, you keep 60% for margin and profit.
Calculate your minimum selling price
Divide your cost price by your desired cost percentage. At €5.20 costs and 40% cost percentage: €5.20 / 0.40 = €13.00 excl. VAT per person.
Check your actual figures monthly
Compare your actual costs with your estimate. Have ingredients become more expensive or are you spending more time? Then you need to adjust your price.
✨ Pro tip
Make agreements about extra portions in your contract. For example: 'up to 10% extra portions free, above that €X per extra person'. This prevents your margin from shrinking due to unexpected guests.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
What margin is normal for corporate catering?
A healthy margin is between 55-65% of your selling price. This means your costs are 35-45% of your revenue. With structural contracts, you can often work with slightly lower margins than with events.
Should I include VAT in my margin calculation?
No, always calculate excl. VAT. Catering has 9% VAT, which you pass on to the client. You calculate your margin based on the price excluding VAT.
How often can I adjust my contract price?
This depends on your contract terms. Many caterers build in an indexation clause for ingredient price increases. With significant cost increases, you can always renegotiate.
What if the client has fewer people than expected?
Work with a minimum order in your contract. For example: 'minimum 40 people, if fewer people, the price applies for 40 people'. This protects your margin.
How do I pass on transportation costs?
Calculate your total monthly transportation costs (fuel, time, wear and tear) and divide by the number of portions. For a daily 30-minute trip, you typically charge €0.25-0.50 per person.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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