Free calculator
Selling price calculator: from food cost to menu price
Work out the net selling price and the gross menu price from what a portion costs – using a target food cost percentage or a cost factor.
Calculate a selling price
Inputs
Net, for example from the recipe costing.
The share of the net price you aim to spend on ingredients.
Starts at 7 %. Enter the rate that applies to what you sell.
Result
To see a result, fill in: Food cost per portion and Target food cost.
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In short
The net selling price is the food cost per portion divided by the target food cost percentage – or, equivalently, the food cost times the cost factor. The gross menu price is the net price plus VAT.
How the selling price is calculated
Both methods give the same price when factor and percentage match: factor = 100 ÷ percentage.
Net price = food cost per portion ÷ (target food cost ÷ 100)Net price = food cost per portion × cost factorGross price = net price × (1 + VAT rate ÷ 100)VAT = gross price − net priceAfter rounding: food cost % = food cost ÷ (rounded gross price ÷ (1 + VAT rate ÷ 100)) × 100
Terms
- Net price
- The price without VAT – your business’s revenue.
- Gross price
- The price including VAT that guests read on the menu and pay.
- Cost factor
- The multiple of the food cost charged as the net price.
Worked example: a main course with €4.20 food cost
A main course has a food cost of €4.20 per portion. The target food cost is 28%, the VAT rate 7%, and the menu price is rounded up to €0.50.
| Food cost per portion | €4.20 |
|---|---|
| Target food cost | 28% |
| VAT rate | 7% |
| Round the gross price up to | €0.50 |
Step by step
- Net price: €4.20 ÷ 0.28 = €15.00
- Gross price: €15.00 × 1.07 = €16.05, of which €1.05 is VAT
- Rounded up to €0.50: €16.50 gross, or €15.42 net
- Food cost after rounding: €4.20 ÷ €15.42 × 100 = 27.2%
- Before rounding, that is a cost factor of 3.57.
The dish goes on the menu at €16.50, leaving €11.22 gross profit per portion.
All values are illustrations, not benchmarks.
What the result means
The calculated price makes food cost the share of the price you set out to have – it does not automatically cover every cost. Staff, rent, energy and profit have to come out of the gross profit.
Round to a menu price that suits your place. Rounding up lowers the food cost percentage a little; the calculator shows by how much.
Check the price against what guests will pay for the dish. If it is well above that, a cheaper recipe usually helps more than a higher percentage.
Frequently asked questions
Food cost percentage or cost factor – which is right?
Both; it is the same calculation. A target food cost of 25 % is a factor of 4, and 30 % is a factor of about 3.33. Use whichever your business works with.
Why round the gross price rather than the net price?
Because guests read and pay the gross price. The calculator rounds it up and works the net price and food cost back out of it, so you see what the round price really means.
Does this price cover all my costs?
Not automatically. The method makes food cost a fixed share of the price. Whether the rest covers staff, overheads and profit depends on your other costs.
Which VAT rate should I enter?
The rate that applies to what you sell. The calculator starts at 7 %; you can enter any rate. Which rate applies in a given case is a question for your tax adviser.
Read on and keep calculating
From our knowledge base
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The calculators help with costing; they are not tax or financial advice. Check tax rates and results for your business.