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 the United States

A complete catering invoice example from Texas, line by line

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.

Read the sample top to bottom and each line has a reason. The four food and service lines add up to $6,850 and each carries 8.25 percent tax, which comes to $565.13 once each line is rounded. Delivery and setup is taxed with the food because it is part of the catering sale. The gratuity line, $1,201.50, sits outside the tax base. The 25 percent deposit is shown as a payment below the total, never as a discount above the tax line.

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.

Ordering tax-exempt catering: best practices for the client and the caterer

Schools, churches, qualifying nonprofits and government agencies often ask for catering without sales tax. The exemption only holds if the paperwork is right, and if it is wrong the missing tax is assessed against the seller. The rules are set state by state. Texas and New York show how different they can be.

In Texas, a nonprofit has to apply to the Comptroller and receive exempt status before it can buy tax free. At purchase it gives the seller a completed Form 01-339, the Texas Sales and Use Tax Exemption Certification, with the seller's name, a description of the items and the reason for the exemption. The form needs no number to be valid; the Comptroller says "tax exempt numbers" do not exist. It goes to the supplier and is not sent to the Comptroller. Purchases must relate to the organization's exempt purpose, and beer, wine and liquor do not usually qualify. Employees and volunteers cannot buy personal items tax free even if the nonprofit reimburses them. Government entities can give the same form or a purchase voucher in the entity's name. A Texas seller does not have to accept a certificate; if you refuse one, the client can ask you for Form 00-985 to claim a refund from the Comptroller.

In New York, an exempt organization receives Form ST-119, its Exempt Organization Certificate with a six-digit exemption number, together with Form ST-119.1, the Exempt Purchase Certificate it hands to vendors. The federal EIN is not a sales tax exemption number. The certificate may only be used for the organization's own purchases, and a member who pays with personal funds is taxed even if the organization reimburses them later. New York and federal government agencies do not use ST-119.1; they buy with a governmental purchase order or another exemption document.

Whatever the state, the habits that protect the caterer are the same. Get the certificate before the event, not with the payment. Check that the purchaser's name on the certificate matches the name on the order and the invoice. Take payment from the organization's own account or card. File the certificate with the event, and print the organization's name, and its exemption number where the state issues one, on the invoice. Alcohol on the same order usually needs its own taxed line.

• Certificate in hand before the event date
• Purchaser name on the certificate matches the order and invoice
• Paid from the exempt organization's own funds
• Items fit the organization's exempt purpose; alcohol billed separately
• Certificate filed with the event; exemption noted on the invoice

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 the United States