It is all too common for couples to receive back their banquet event order (BEO) from the caterer and be incredibly confused that the $50 per person dinner now has multiple layers of taxes, fees, and gratuity added on. For almost every couple I work with, we end up chatting about the difference between the service charge and gratuity. So here we are… Let’s break these fees down.
Explain this “Service Charge”
The service charge is a mandatory and automatic fee that is added to your catering or venue contract. This charge and any other fees are almost always listed in the fine print on the bottom of the documents when you get those initial price brochures. Most Seattle caterers, venues and hotels charge a 20-22% charge (The full range I have seen is 18-24%). This is applied to the entire bill — food, beverage, staffing, any upgrade charges.
What does the Service Charge pay for?
The exact breakdown of what this service charge covers is different for each caterer/venue. If you want a list of that vendor’s specific breakdown, don’t be afraid to ask for an itemized breakdown. Speaking in general terms, the service charge covers the venue/caterer’s labor and administrative costs. An “Event Production Fee” or “the cost of doing business” are some other options of how to think of it. Some examples of where this fee goes are dishwashing, facility maintenance, packing for the event, travel time to and from the event, walk-throughs, floorplans, the sales staff’s time they spent planning with you, etc.
Before booking a caterer/venue, be sure that their proposal has the “all-inclusive cost” and all fees and taxes are included in that estimate. If you don’t receive this “all-inclusive cost”, but sign your contract, you will get your full all-inclusive bill that is about 30% (22% service charge + Seattle Tax of 9.6%) higher than what you had budgeted for.
PRO TIP:: When you receive your initial quote that states $60.00++, those two pluses signify all those taxes and fees. Be sure to ask to see an example of a final quote.
What is gratuity?
Definition:: Something given voluntarily or beyond obligation for someone who has performed a service.
Just as you would tip your waitstaff at a restaurant or your hairstylist for great service, you tip your waitstaff and bartenders. (Have more questions about Tipping… check out our tips on that here.) Gratuity to the staff isn’t something you are obligated to do, however, I will say that is pretty customary. Double check your catering contract, as some caterers include this in their initial estimate. Others will leave a line on the final invoice where you can write in the gratuity either before or after the event and run it through with the final payment. If you would prefer to provide the gratuity in cash, place it in a sealed envelope and have a family member or friend give it to the lead server at the end of the night.
Please remember in the the State of Washington sales tax is charged on top of both the subtotal and the service charge. Some basic math looks like this::
What other questions does this bring up? Leave us a comment below and we will answer!