What is the food cost formula?
Food cost percentage is the share of a dish's selling price that goes on its ingredients. The formula is:
Plate cost is the total cost of the ingredients in one portion. Menu price is what the customer pays, minus GST, VAT or sales tax, because the tax is not your money. Run the formula the other way to price a dish: menu price = plate cost ÷ target food cost %.
A worked example
Take a cheeseburger with chips, priced at $19.80 on the menu. In Australia that includes 10% GST, so the price before tax is $19.80 ÷ 1.1 = $18.00. The ingredients cost:
| Ingredient | Cost per unit | Quantity | Line cost |
|---|---|---|---|
| Beef patty | $18.00 per kg | 0.15 kg | $2.70 |
| Brioche bun | $0.60 each | 1 | $0.60 |
| Cheese slice | $0.35 each | 1 | $0.35 |
| Lettuce, tomato & sauce | $0.40 per serve | 1 | $0.40 |
| Chips | $4.50 per kg | 0.2 kg | $0.90 |
| Plate cost | $4.95 |
Food cost is $4.95 ÷ $18.00 × 100 = 27.5%. If you are aiming for 30%, the lowest price that hits your target is $4.95 ÷ 0.30 = $16.50 before tax. At $18.00 you are comfortably inside it, with $13.05 of gross profit per plate to cover wages, rent and everything else. These are the numbers pre-filled in the calculator above, so you can change one and watch the rest move.
What is a good food cost percentage?
For most restaurants, a commonly quoted range is about 28 to 35% across the menu. These are general industry rules of thumb rather than fixed targets, and venues vary widely:
| Type of venue | Commonly quoted food cost range |
|---|---|
| Full-service restaurant | About 28 to 35% |
| Fine dining | Often higher, around 30 to 40% |
| Quick service and takeaway | Often lower, around 25 to 32% |
| Cafe food | Around 25 to 35% |
| Coffee and non-alcoholic drinks | Usually well below food, often 15 to 25% |
Do not chase a single number across every dish. A high-cost steak can carry a higher percentage and still earn more dollars per plate than a cheap side. What matters is the blended food cost across what you actually sell, and the cash margin each dish brings in. Wages, rent and energy decide how much room you really have.
How do you cost a recipe step by step?
Recipe costing is the plate cost calculation done carefully, once per dish, and kept up to date.
- List every ingredient. Write down everything that goes on the plate, including oil, sauces, garnish and packaging for takeaway.
- Price each ingredient per unit. Take the current supplier price and turn it into a cost per kilogram, litre or piece. Adjust for trim and yield where it matters.
- Multiply by the quantity used. Multiply the cost per unit by the amount in one portion, in the same unit, to get each line cost.
- Add the lines to get the plate cost. The sum of the line costs is the plate cost: what one portion costs you in ingredients.
- Divide by the menu price. Food cost % = plate cost ÷ menu price (before tax) × 100.
Two details make the biggest difference. The first is yield: a 1 kg brisket that loses 35% in trimming and cooking gives you 650 g to serve, so the real cost per usable kilogram is the purchase price ÷ 0.65. The second is keeping prices current. Re-cost your top sellers whenever a supplier price moves, not once a year.
What is actual vs theoretical food cost?
Theoretical food cost is what your recipes say you should have used for what you sold. Actual food cost is what you really used: opening stock plus purchases minus closing stock. The gap between the two is where margin leaks: waste, over-portioning, spoilage, unrecorded staff meals and the occasional theft.
A calculator gives you the theoretical number for one dish. To see the gap across the whole kitchen you need recipe-based inventory. In SureTill, each dish's recipe is deducted from stock the moment the order is sent to the kitchen, with unit conversion, wastage recording, batches and expiry, and low-stock alerts. The stock on hand in SureTill is what your recipes say you should have; your stock count is what you actually have. The difference is your variance, and you can see it item by item. Read how it works on the inventory page.
Frequently asked
How do you calculate food cost percentage?
Divide the plate cost by the menu price before tax and multiply by 100. A dish that costs $4.95 in ingredients and sells for $18 ex-GST has a food cost of 27.5%.
What is a good food cost percentage for a restaurant?
A commonly quoted range for restaurants is about 28 to 35%, with quick-service venues often lower and fine dining often higher. Treat it as a starting point: the right number depends on your menu, prices and other costs.
How do I set a menu price from a target food cost?
Divide the plate cost by the target food cost as a decimal. For a $4.95 plate cost and a 30% target, $4.95 ÷ 0.30 = $16.50 before tax. Then round to a sensible menu price.
Should the menu price include GST or VAT?
No. Use the price before tax, because the tax is not your revenue. In Australia, divide a GST-inclusive price by 1.1 to get the ex-GST price before you calculate food cost.
What is the difference between theoretical and actual food cost?
Theoretical food cost is what your recipes say you should have used for what you sold. Actual food cost comes from a stock count: opening stock plus purchases minus closing stock. The gap shows waste, over-portioning and errors.
The calculator runs in your browser and does not store anything you type. Food cost ranges are general guidance, not financial advice.