Food cost percentage: how to calculate it (free calculator)

Food cost percentage is the cost of food used, divided by net food sales. Cost of food used is opening inventory plus purchases minus closing inventory. Enter sales excluding VAT or sales tax so the percentage sits on the same net basis as the other tools.

Plate cost is the ingredient cost of one dish divided by the selling price of that dish. That percentage is not profit margin: it only accounts for the food on the plate.

• Food sales should be net, excluding VAT or sales tax.
• Drinks can be kept out of this calculation if you want a food-only figure.
• Plate cost does not include labour, waste, discounts or delivery fees unless you have already put them in the portion cost.
• Planning estimate. Check classifications with your accountant.

Plate cost uses the same idea for a single portion. Add up the cost of every ingredient in one portion at today’s supplier prices, including the garnish, the sauce and the oil in the pan. Divide by the menu price before VAT and service charge, and multiply by 100.

For example, a dish with $7.80 of ingredients on a $26 menu price has a plate cost of 30%. Do this for every dish, then compare the average with your actual food cost from the stock count. If the actual number is several points higher, look at portions, waste and recipe cards that have not been updated.

There is no single right number, and I would be careful with anyone who gives you one without knowing your concept. A steakhouse, a noodle shop and a patisserie have very different ingredient costs and very different prices. What matters is:

• Your own target, set from your menu prices and your other costs, so the whole P&L works.
• Your trend. If food cost moves up a point or two and stays there, something changed: supplier prices, portions, waste or theft.
• Your menu mix. Selling more of a high-cost dish raises the overall percentage even if nothing went wrong.

A monthly P&L review matters for exactly this reason: the one-point creep in food cost is easy to miss and expensive over a year. On $20,000 of monthly food sales, one point is $200 a month. Use the same figures in your own currency.

Your recipe cards give a theoretical food cost. The stock count gives the actual one. The gap is where the money goes. Common causes:

• Portions drifting bigger on busy nights.
• Waste: over-prep, spoilage, dropped plates, staff meals not recorded.
• Supplier prices rising without the recipe cards being updated.
• Comps and voids that are not recorded properly.
• Invoices posted in the wrong month, or deliveries never invoiced.
• Counting errors: different person, different time, different units.

1. Cost every recipe and update the cost when supplier prices change.
2. Fix portion sizes with scales, ladles and plating photos at the pass.
3. Track waste on a simple sheet in the kitchen for a month. What gets written down gets fixed.
4. Order to par levels, not by feel, and rotate stock first in, first out.
5. Check deliveries against the invoice for weight and quality before you sign.
6. Review the menu mix and price the dishes that are popular but cost too much. See how to price your menu for profit.

Monthly at minimum, from a real stock count. Weekly is better if you can count your high-value items, such as meat, seafood and dairy, each week. The same person should count at the same time, using the same units. Consistency matters more than precision.