How to calculate food cost, per dish, per menu and per week
The formula takes one line. Almost every kitchen still gets the number wrong, because of two inputs the formula does not mention: what you divide by, and what you count as cost. This is the method, with the working shown.
About this guide to calculating food cost
The short answer: how to calculate food cost
Food cost percentage is the cost of the ingredients divided by the net selling price, multiplied by 100. For a dish costing £6.05 and sold at £21.00 on the menu, the net price is £17.50 once 20 percent VAT is taken out, so food cost is 34.6 percent. For a whole week, it is food used (opening stock plus purchases minus closing stock) divided by net food sales.
Three food costs, and why they differ
People say “food cost” as if it were one number. It is three, and the gaps between them are the point of measuring any of them.
| Measure | Built from | What it tells you |
|---|---|---|
| Theoretical food cost | Recipe costings multiplied by what was sold | What the menu should cost if every portion is exactly to spec |
| Actual food cost | Opening stock plus purchases minus closing stock | What the kitchen really used |
| Variance | Actual minus theoretical | Waste, over portioning, theft, wrong prices and costing errors |
A dish costing is the theoretical figure. A stock take produces the actual one. If you only ever calculate one of them, you cannot tell a costing problem from a kitchen problem. The variance is what the food cost control guide is about; this page is about getting the two numbers right.
How to calculate food cost for one dish
Five steps, in this order. The order matters because each step feeds the next.
- Cost every ingredient at its yielded price. Not the invoice price. Divide the invoice cost per kilo by the usable percentage.
- Add the sundries. Oil, seasoning, garnish, a share of any sauce or sub recipe. Small lines are where costings leak.
- Total it for the plate cost.
- Take VAT off the menu price. Divide by 1.2 to get the net selling price.
- Divide plate cost by net price. That is food cost. One minus it is gross profit.
The formula
Food cost % = plate cost divided by net selling price, x 100.
A worked example
An illustrative 200g sirloin main with chips and peppercorn sauce, sold at £21.00.
| Ingredient | Invoice price | Yield | Cost per usable kilo | On the plate |
|---|---|---|---|---|
| Sirloin, 200g trimmed | £14.00 /kg | 80% | £17.50 | £3.50 |
| Potatoes for chips, 250g | £1.20 /kg | 80% | £1.50 | £0.38 |
| Peppercorn sauce, 60ml | From the sauce costing | £0.62 | ||
| Mushroom and tomato | From the garnish costing | £0.60 | ||
| Watercress garnish | Costed per portion | £0.55 | ||
| Oil, seasoning, sundries | Allowance | £0.40 | ||
| Plate cost | £6.05 | |||
The menu price is £21.00, so the net price is £21.00 divided by 1.2, which is £17.50. Food cost is £6.05 divided by £17.50: 34.6 percent. Gross profit is 65.4 percent, and cash gross profit is £11.45 a plate.
The recipe costing calculator does the yield step and the totals for you, and the food cost calculator gives the percentage, the cash margin and the dish's place on the menu engineering matrix.
The two errors that move the number most
Dividing by the menu price instead of the net price
Divide £6.05 by the £21.00 on the menu and the answer is 28.8 percent. That looks comfortably under a 30 percent target. It is wrong by almost six points, because the £21.00 includes VAT you do not keep. The honest figure is 34.6 percent, and the dish is not under target at all. This is the most common error in UK food costing and the reason most online calculators, which come from markets that quote prices without sales tax, are not safe to use here. The same trap sits behind pricing a dish from a target margin.
Costing at the invoice price instead of the yielded price
Cost the same steak at £14.00 a kilo as invoiced and 200g is £2.80, not £3.50. The plate cost drops to £5.35 and food cost to 30.6 percent. Four points of margin vanish from the costing sheet, not from the kitchen. Every protein, and anything trimmed, peeled or cooked down, is understated the same way. Yield is the single biggest reason a menu costed on paper does not match the stock take.
How to calculate food cost for a week or a month
The period figure comes from the stock take, not from the recipes.
Actual food cost
Food used = opening stock + purchases − closing stock. Food cost % = food used divided by net food sales, x 100.
An illustrative week:
| Amount | |
|---|---|
| Opening stock | £8,000 |
| Purchases, net of VAT | £21,000 |
| Closing stock | £7,500 |
| Food used | £21,500 |
| Net food sales | £65,000 |
| Actual food cost | 33.1% |
Now compare it with the theoretical figure. If the recipe costings, multiplied by what the till says was sold, give 31.0 percent, the variance is 2.1 points. On £65,000 of net sales that is about £1,365 in one week that the costings say should still be in the business. The cause is somewhere in waste, portioning, prep, theft, supplier prices or a costing that is out of date, and it can only be found by looking.
Three rules keep the period figure honest:
- Use the same basis for both sides. Purchases and sales both net of VAT.
- Count everything that left the stock. Staff meals, wastage and any food given away, or the figure flatters you.
- Stock take the same way every time. The same day, the same areas, valued at the same prices. A change in method looks like a change in cost.
What is a good food cost percentage?
There is no single answer, and anyone who gives you one is guessing about your rent, labour and room. The right target is the one that covers your other costs and leaves the profit you need at the price your room will pay. It is easier to set from the other end, as a gross profit target, which is how the pricing guide works it. Food cost and gross profit add up to 100, so a 30 percent food cost is a 70 percent GP. What matters in practice is that the number is calculated on the right basis, and that you measure the gap between the costed figure and the actual one.
Common mistakes when calculating food cost
- Using the gross menu price. Always divide by the net price.
- Costing on invoice weight. Cost on usable weight.
- Leaving out sub recipes and sundries. A sauce, a garnish and a splash of oil are real cost.
- Letting costings go stale. A dish costed eighteen months ago is not costed now. Update the plate cost when a core ingredient moves.
- Mixing food cost and GP in the same conversation. They are the same measure from opposite ends and sum to 100. Pick one and say which.
- Judging dishes on percentage alone. A low food cost percentage on a low priced dish can earn less cash than a higher percentage on a dearer one. The menu engineering approach scores cash margin and popularity together, and the labour guide adds the time a dish takes.
How often should you calculate food cost?
The period figure belongs on a weekly stock take, so a problem is found in the week it starts rather than at the end of a quarter. The dish figure should be refreshed whenever a major ingredient price moves, whenever a recipe changes and whenever you reprice. A menu audit rebuilds all of it at once: every dish costed on yield and net price, scored against sales, with the variance traced.
Calculating food cost: FAQs
How do you calculate food cost percentage?
Divide the cost of the ingredients by the net selling price, then multiply by 100. For a dish costing £6.05 and sold at £21.00 including VAT, take the VAT off first: £21.00 divided by 1.2 is £17.50. Then £6.05 divided by £17.50 gives a food cost of 34.6 percent.
How do I calculate the food cost of a recipe?
List every ingredient with its cost per usable kilo, found by dividing the invoice price by the yield percentage. Multiply each by the quantity on the plate, add the sundries, and total the result. That total is the plate cost. Divide it by the net selling price to get the food cost percentage.
Should food cost be calculated before or after VAT?
Calculate it on the net price, before VAT. VAT is collected for HMRC and is not revenue. Dividing by the menu price that includes VAT understates food cost by about a sixth, so a dish at 34.6 percent looks like 28.8 percent. Purchases should be net of VAT as well.
How do you calculate actual food cost for a week?
Add the week's purchases to the opening stock value and subtract the closing stock value to get the food used. Divide that by net food sales for the week and multiply by 100. Include staff meals and wastage in what was used, and keep purchases and sales on the same VAT basis.
What is the difference between theoretical and actual food cost?
Theoretical food cost is what the recipes say the food sold should have cost, built from costings and sales. Actual food cost is what the stock take says the kitchen used. The difference is the variance, and it points to waste, over portioning, theft, price changes or out of date costings.
Why is my actual food cost higher than my costing?
Usually a mix of things the costing does not capture: trim and waste, portions running over spec, supplier prices that moved after the dish was costed, staff meals, and sundries left out of the recipe. Start by checking the yield on your most expensive proteins, then compare portion weights against the spec.
Keep reading. The same method behaves differently by section: main courses (protein and usable weight), breakfast (many small components) and menu profitability by section.
How this page is sourced
The formulas are standard and can be checked against the calculators on this site. The worked figures, including the sirloin plate, the yields, the £65,000 week and the stock values, are illustrative and are not client data or a benchmark. No external statistic is quoted. No target percentage is given, because the right one depends on your own costs and room.
What a variance is worth, and where it comes from, can only be found by measuring it, which is what a menu audit does. If you spot an error, tell me and it will be corrected with the review date updated.
Costed on paper is not the same as costed right.
Send your current menu and last quarter's food GP. I will come back with the three dishes where I would check the costing first and why. No charge for that.