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Food Cost & Menu Margin Calculator

Enter ingredient cost and selling price to get food-cost percentage, gross profit, and margin — plus a suggested price for your target food-cost %.

Food cost %
29.2%
Gross profit / item
$8.50
Gross margin %
70.8%
Suggested price @ 30% food cost
$11.67

Food cost % = ingredient cost ÷ selling price. Most restaurants aim for 28–35%. To hit your target, price the item at about $11.67.

What is food cost percentage?

Food cost percentage is the share of a menu item's price that goes to its ingredients: ingredient cost ÷ selling price × 100. It's the single most important number in menu pricing. Most profitable restaurants keep food cost between 28% and 35% — low enough to cover labor, rent, and overhead while leaving a margin.

How to price a menu item

  • Add up the ingredient cost of one portion (including garnish and waste).
  • Set a target food cost % — 30% is a common starting point.
  • The calculator's suggested price = ingredient cost ÷ target %.

A worked example

A chicken karahi portion uses $3.10 of chicken, $0.90 of tomatoes, onions and spices, $0.40 of oil and ghee, and $0.35 of garnish and packaging: $4.75 in total. At a 30% target food cost the suggested price is $4.75 ÷ 0.30 = $15.83, which you would round to $15.99. Sold at $12.99 instead, the food cost is 36.6% and the gross profit per plate drops from $11.24 to $8.24 — a difference of $3.00 on every order, or $900 a month on 300 portions.

Costing a recipe properly

  • Cost the whole purchase unit, then divide. A 5 kg bag of rice at $9 is $0.18 per 100 g; a recipe using 150 g costs $0.27.
  • Include yield loss. If a whole chicken loses 30% to bones and trimming, the usable meat costs 1.43× the purchase price per kilo.
  • Add packaging for takeaway and delivery items. A container, lid, bag and napkins often add $0.30–$0.60 to a portion.
  • Re-cost quarterly. Ingredient prices move; a dish priced at 30% last year may be at 38% now without anyone noticing.

Frequently asked questions

What food cost percentage should I aim for?

28–35% is typical. Higher-end and ingredient-heavy dishes can run higher; drinks and sides usually run much lower, which is why a balanced menu matters more than any single item.

Is food cost the same as gross margin?

They are two views of the same number: gross margin = 100% − food cost %. A dish at 32% food cost has a 68% gross margin. Neither includes labour, rent or utilities, which is why a “profitable” dish still needs volume.

Should delivery-app orders be priced differently?

If an app takes 25%, an item at 30% food cost effectively runs at 40% of what you actually receive. Use the commission calculator to see the real margin on app orders before deciding on separate menu prices.

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