Free calculator
Food cost calculator for restaurants
Work out what a portion costs in ingredients, its food cost percentage, and what is left of the selling price after food cost.
Calculate food cost
Inputs
Net purchase value of every ingredient in the batch.
How many portions the batch makes.
As it is on the menu.
Starts at 7 %. Enter the rate that applies to what you sell.
For example per month – for the totals.
Result
To see a result, fill in: Total ingredient cost, Portions, and Selling price per portion.
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In short
Food cost is the purchase value of the ingredients that go into a dish. The food cost percentage relates it to the net selling price: food cost per portion ÷ net selling price × 100. What is left of the net price is the gross profit – it pays for staff, rent, energy and profit.
How food cost is calculated
The calculator uses these formulas. It works with the net selling price: the VAT in a menu price is passed on to the tax office and is not revenue.
Food cost per portion = ingredient cost ÷ portionsNet selling price = gross selling price ÷ (1 + VAT rate ÷ 100)Food cost % = food cost per portion ÷ net selling price × 100Gross profit per portion = net selling price − food cost per portionGross margin % = gross profit ÷ net selling price × 100 = 100 − food cost %Cost factor = net selling price ÷ food cost per portion
Terms
- Ingredient cost
- The purchase value of every ingredient in the batch you prepare – at net purchase prices, garnish, fat and seasoning included.
- Gross profit
- Net revenue minus food cost. Every other cost, and the profit, is paid out of it.
- Cost factor
- How many times the food cost goes into the net price. It is the inverse of the food cost percentage: 100 ÷ percentage.
Worked example: goulash for 40 portions
The ingredients for a pot of goulash cost €168.00 net and make 40 portions. On the menu the dish is €16.90 including 7% VAT. 120 portions are sold a month.
| Total ingredient cost | €168.00 |
|---|---|
| Portions | 40 |
| Selling price per portion | €16.90 |
| VAT rate | 7% |
| Portions sold | 120 |
Step by step
- Food cost per portion: €168.00 ÷ 40 = €4.20
- Net selling price: €16.90 ÷ 1.07 = €15.79
- Food cost percentage: €4.20 ÷ €15.79 × 100 = 26.6%
- Gross profit per portion: €15.79 − €4.20 = €11.59, or 73.4% of the net price
- For 120 portions sold: €1,895.33 net revenue, €504.00 food cost and €1,391.33 gross profit
Of every euro of net revenue from this dish, about 27 cents go to ingredients.
All values are illustrations, not benchmarks.
What the result means
The food cost percentage shows how much of the net price is spent on ingredients. Whether a value is right depends on your concept: an operation with a lot of labour needs more gross profit per plate than one with simple preparation. So compare the percentage with your own target, not with a rule of thumb.
Often more important than the percentage is the gross profit in euros. A dish with a higher percentage can leave more money than one with a lower percentage if it sells for more or more often.
Above 100 %, the price does not even cover the ingredients. If the calculated food cost is well below what your stocktake shows, losses are usually missing: spoilage, trim loss, larger portions or staff meals.
Frequently asked questions
Is food cost calculated on the gross or the net price?
On the net price. The VAT in a menu price goes to the tax office; it is not your revenue. Calculating with the gross price makes the food cost percentage look too low. That is why the calculator takes VAT out when you enter a gross price.
What counts as food cost?
Every ingredient that ends up in the dish – garnish, fat, seasoning and sauces included – valued at the net purchase price. For ingredients with trim or cooking loss, the quantity bought counts, not the quantity on the plate. Staff, energy and packaging are not food cost; they are paid out of gross profit.
What is the difference between food cost and gross profit?
Food cost is what the ingredients cost. Gross profit is what is left of the net price after food cost. Food cost percentage and gross margin always add up to 100 %.
How do food cost percentage and cost factor relate?
They are two ways of writing the same number: cost factor = 100 ÷ food cost percentage. A percentage of 25 % is a factor of 4, and 30 % is a factor of about 3.33.
Read on and keep calculating
From our knowledge base
Next, in CulinaryCube
The calculators help with costing; they are not tax or financial advice. Check tax rates and results for your business.