Food Cost Percentage Calculator
Menu item profitability.
Calculate restaurant food cost percentage and margin. Free educational calculator with methodology and a worked example.
What this tool does
This tool calculates food cost percentage and gross margin for restaurant menu items.
Enter Values
Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
Food cost percentage = ingredient cost / menu price. Restaurant industry targets 28-35%. This calculator shows your percentage plus what price achieves target margin.
4 ingredients on 14 menu item = 28.6% food cost, 10 gross margin (71.4% GP). At target 28%, this item needs 14.29 price - already essentially at target.
Lower is better - but customers have price sensitivity ceilings. Balance margin with menu appeal. Staff meals and waste (usually 5-10%) should be factored into true cost.
Run it with sensible defaults
Using ingredient cost of 4, menu price of 14, the calculation works out to 28.57%. Nudge the inputs toward your own situation and the output recalculates instantly. The defaults are meant as a starting point, not a recommendation.
The levers in this calculation
The inputs — Ingredient Cost and Menu Price — do not pull with equal force. Frequency and unit price pull the total in different directions. The biggest surprise for most people is how small recurring amounts compound into large annual figures — that's where this calculation earns its keep.
How the math works
Food cost % = ingredient cost / menu price × 100. Gross margin = price - cost. The working is transparent — you can verify every step yourself in the formula section below. No black box, no opaque "proprietary model".
Using this as a check-in
Re-run this every three months. A single reading tells you where you stand; four readings tell you whether things are improving. The trend matters more than any individual snapshot.
What this doesn't capture
The score is a composite of the inputs you provide. Life context — job security, family obligations, health, housing — doesn't appear in the math but shapes the real picture. Use the number as a prompt, not a verdict.
£4 £ cost / £14 £ price = 28.57%.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
Food cost % = ingredient cost / menu price × 100. Gross margin = price - cost.
Frequently Asked Questions
Industry targets?
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