Picture this: you're selling lasagne for €24.50, thinking you're making good money because ingredients only cost €7.20. But after accounting for packaging, labor, and overhead, you discover your actual margin is just 15.6%. Most caterers fall into this trap by only calculating ingredient costs.
What is margin in catering?
Margin represents the percentage of your selling price left after subtracting all costs. For caterers, this means ingredient costs plus packaging, labor, overhead, and delivery expenses.
💡 Example:
Lasagne for 4 people - selling price €24.50 incl. VAT:
- Ingredients: €7.20
- Packaging (container, lid, sticker): €1.10
- Labor (30 min at €18/hour): €9.00
- Overhead (15% of revenue): €3.37
Total costs: €20.67
Margin: (€24.50 - €20.67) / €24.50 × 100 = 15.6%
All cost items for caterers
A proper cost calculation includes way more than just ingredients:
- Ingredient costs: Every product that goes into the dish
- Packaging costs: Containers, lids, labels, bags
- Labor costs: Time for prep, packaging, admin work
- Overhead: Rent, energy bills, insurance, equipment depreciation
- Delivery costs: Fuel, vehicle maintenance, driver wages
⚠️ Note:
Many caterers only factor in ingredients and think they've got 30% cost price. But with all costs included, you're often looking at 70-80% of your selling price.
Calculate labor costs correctly
Labor costs usually eat up the biggest chunk of your budget, yet they're constantly underestimated. Don't just count wages - include total employment costs:
- Gross wage: What you actually pay out
- Employer contributions: Roughly 25% on top
- Holiday pay and 13th month: Another 15% extra
- Sick leave and replacement: About 5% more
💡 Example labor costs:
Chef earning €15/hour gross wage:
- Gross wage: €15.00
- Employer contributions (25%): €3.75
- Holiday pay/13th month (15%): €2.25
- Sick leave/replacement (5%): €0.75
Real hourly rate: €21.75
Determine overhead percentage
Overhead covers all costs you can't tie directly to a specific product. For most caterers, this runs between 12-20% of revenue:
- Kitchen and shop rent
- Gas, water, electricity
- Insurance premiums
- Accountant, administrative costs
- Equipment depreciation
- Marketing and advertising
Figure out your overhead percentage by dividing total annual costs by annual revenue. Apply this percentage to every cost calculation you do.
Different margins per product group
Not every catering product delivers the same margin. Here's what's typical by category:
- Hot meals: 15-25% margin
- Cold salads: 25-35% margin
- Soups: 30-40% margin
- Sandwiches/rolls: 35-45% margin
- Cakes/pastries: 20-30% margin
💡 Example product mix:
Caterer with €10,000 weekly revenue:
- Hot meals (60%): €6,000 at 20% margin = €1,200
- Cold salads (25%): €2,500 at 30% margin = €750
- Soups (15%): €1,500 at 35% margin = €525
Total margin: €2,475 = 24.8%
Account for seasonal fluctuations
Caterers face major seasonal swings. So calculate using annual averages, not your best months:
- December and January: often 40-50% higher revenue
- Summer months: typically 20-30% less revenue
- Holidays: peak days with better margins
- Weekdays vs. weekends: completely different product mix
⚠️ Note:
Calculate your average margin across a full year. Focus only on December numbers and everything looks amazing. But August might tell a very different story - that's the kind of thing you only learn after closing your first month at a loss.
Digital tools
Tracking all margins manually in Excel gets messy fast. A system like KitchenNmbrs helps you:
- Record recipes with precise cost prices
- Track packaging costs per product
- Automatically factor in labor costs
- Monitor margins by product group
This gives you instant visibility into which products make the most money and where to focus your efforts.
How do you calculate the margin on a catering assortment? (step by step)
Calculate all ingredient costs per product
Make a list of all ingredients and their quantity per portion. Also include spices, oil and garnish. Calculate with current purchase prices from your suppliers.
Add packaging and labor costs
Add packaging costs (container, lid, label). Calculate labor costs by multiplying preparation time by actual hourly rate (including employer contributions).
Add overhead and calculate margin
Add your overhead percentage (usually 12-20%) to the costs. Subtract total costs from selling price and divide by selling price to get your margin percentage.
✨ Pro tip
Track margins on your top 8 products every 2 weeks during supplier price changes. These items usually represent 75% of your total revenue, so staying on top of them keeps your profitability stable.
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 is a healthy margin for catering products?
Hot meals typically run 15-25% margin, while cold salads hit 25-35%. Soups and sandwiches can reach 30-45% margin since they need less labor time.
Should I include VAT in my margin calculation?
Never include VAT in margin calculations. Your €24.50 selling price with 9% VAT becomes €22.48 excluding VAT for the actual margin math. Always work with pre-tax numbers.
How do I handle waste and spoilage in margin calculations?
Track your actual waste percentage over 3 months and add it to ingredient costs. Most caterers see 3-8% waste, but it varies by product type and storage methods.
📚 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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