How to calculate food cost percentage
Food cost percentage = food cost ÷ net food sales × 100. For one dish, divide the complete food cost per portion by its selling price excluding sales VAT. For a period of trading, use the corresponding food consumed and net food sales for the same period.
Food cost % = food cost ÷ net sales × 100
Food GP % = 100 − food cost %
At £5 food cost and £20 selling price including 20% VAT, net sales are £20 ÷ 1.20 = £16.6667 before rounding. Food cost is therefore 30%, and food GP is 70%. Those two percentages add to 100% only when they use the same costs and sales definition.
Use the free food GP calculator for the arithmetic. If you already know your menu price and target margin, its maximum-cost mode gives the food-cost allowance to work within.
Turn pack prices into usable portion costs
First put the pack size and recipe quantity into matching units. A 2 kg pack and a 180 g portion become 2,000 g and 180 g. Divide the pack price by the usable pack quantity, then multiply by the portion quantity.
Yield is the share of the purchased product that becomes usable food. If a £20 pack contains 2 kg as purchased and yields 80%, it provides 1.6 kg usable product. A 160 g usable portion costs £20 ÷ 1,600 × 160 = £2.00.
Usable quantity = purchased quantity × yield fraction
Portion cost = pack price ÷ usable quantity × portion quantity
Be consistent about whether the portion is raw, trimmed or cooked. A raw portion weight cannot be compared directly with a cooked yield without the appropriate conversion. Include each loss once: do not apply a separate trimming allowance if that same loss is already included in your yield.
For a bought-in portion, use the pack’s actual usable portion count. Add accompaniments, sauces and finishing ingredients separately. Exclude input VAT you can recover; include VAT you cannot recover in your cost.
A complete-plate example
The following is an illustrative costing worksheet, not a supplier quotation. The amounts represent the usable ingredients allocated to one sold portion.
| Component | Cost |
|---|---|
| Main ingredient | £2.40 |
| Potato accompaniment | £0.65 |
| Vegetables | £0.55 |
| Sauce | £0.30 |
| Oil and seasoning | £0.15 |
| Garnish | £0.20 |
| Total food cost | £4.25 |
At a £17 menu price including 20% VAT, net sales are £14.1667 before rounding. The £4.25 recipe cost is 30% of net sales, leaving 70% food GP. Labour, rent and overheads have not been deducted.
Record the supplier, purchase unit, dated cost and usable portion specification alongside the number. That makes it possible to update a recipe when a pack price, garnish or portion changes rather than working from an old assumption.
Actual food cost over a trading period
For an operation with stock, the basic food-used calculation is opening stock + purchases − closing stock, with relevant transfers and other adjustments treated consistently. Match it to net food sales from the same period. If drinks sales are included, the corresponding beverage cost must also be included; do not mix a food-only numerator with all revenue.
For example, £2,000 opening stock plus £8,000 purchases minus £1,500 closing stock gives £8,500 food used before any other adjustments. Against £25,000 net food sales, that is 34% food cost and 66% food GP.
Actual cost may differ from standard recipes because of wastage, staff meals, portions, price changes, transfers, discounts and sales mix. Investigate those differences using consistent records. Supplier payments alone do not establish food consumed during the period.
There is no single food-cost percentage that guarantees a viable business. A labour-intensive format and a low-labour format can have different operating costs even at the same food GP. See the margin and markup guide and the menu-pricing process before choosing targets.
A simple recipe-costing worksheet
Download the blank CSV below to record ingredient pack costs, usable yields and portion costs. It is a data-entry worksheet, not an automated spreadsheet; calculate the values using the formulas above, then enter the total food cost into the GP calculator. No login or email address is required.
The file contains no macros or formulas and is intended to be opened in a spreadsheet application. Replace all blank fields with verified purchase and recipe information.
DishLab supports product sourcing and cost control, menu development and practical specification handovers. Costing is most useful when the recipe, portion and purchasing information match what happens in service.
About this guide
Prepared for DishLab’s food-development and kitchen-implementation website. Examples are illustrative arithmetic, not recommended margins, supplier prices or tax advice. Confirm tax treatment and cost classification for your own operation. Calculations shown here use pounds sterling.