Food cost is the percentage of your selling price that goes to ingredients. Many restaurant owners estimate this, causing them to lose money without knowing it...
Most restaurants fail because owners think they're making money when they're actually bleeding cash. Food cost is the percentage of your selling price that goes to ingredients. Many restaurant owners estimate this, causing them to lose money without knowing it.
What exactly is food cost?
Food cost is the percentage of your selling price (excl. VAT) that you spend on ingredients. It's one of the most important figures to know if your dishes actually turn a profit.
💡 Example:
You sell a pasta carbonara for €18.50 (incl. 9% VAT).
Selling price excl. VAT: €18.50 / 1.09 = €16.97
Ingredient costs: €5.10
Food cost: (€5.10 / €16.97) × 100 = 30.1%
The correct formula for food cost
The formula looks simple, but the devil's in the details:
Food cost % = (Ingredient costs / Selling price excl. VAT) × 100
⚠️ Watch out:
Always calculate with the price EXCLUDING VAT. Your menu shows prices including VAT. If you calculate with incl. VAT, your food cost appears lower than reality.
Count all ingredients
For ingredient costs, you count EVERYTHING that touches the plate:
- Main ingredients (meat, fish, pasta)
- Garnishes and vegetables
- Sauces and dressings
- Oil, butter, herbs
- Bread on the side
- Decoration on the plate
💡 Example: Steak with fries
Menu price: €32.00 (incl. 9% VAT) = €29.36 excl. VAT
Steak 200g: €6.40
Fries 300g: €1.20
Sauce: €0.80
Vegetables: €1.40
Butter on plate: €0.20
Total ingredients: €10.00 → Food cost: 34.1%
Step-by-step calculation
For an accurate food cost calculation, follow these steps:
Step 1: Determine your selling price excl. VAT
Menu price divided by 1.09 (at 9% VAT) or by 1.21 (at 21% VAT for alcoholic beverages).
Step 2: Calculate your ingredient costs
Go through your recipe and note for each ingredient:
- Purchase price per unit (kilo, liter, piece)
- Amount used in the dish
- Cost of that amount
Step 3: Add trimming loss and waste
Calculate 5-15% extra costs for trimming loss, depending on the ingredient. With meat and fish, this trimming loss runs higher than with pasta or rice.
Step 4: Apply the formula
Divide the total ingredient costs by the selling price excl. VAT and multiply by 100.
Common food cost percentages
A typical food cost for restaurants falls between 28% and 35%. This varies by type of establishment:
- Fine dining: 28-35%
- Casual dining: 28-35%
- Bistro/brasserie: 25-32%
- Pizzeria: 20-28%
- Fast casual: 25-30%
⚠️ Watch out:
These are guidelines, not gospel. Your situation might differ due to location, concept, or pricing strategy.
From food cost to selling price
You can also flip the formula to calculate what you should charge at minimum:
Minimum selling price excl. VAT = Ingredient costs / (Food cost % / 100)
💡 Example:
Your ingredients cost €9.00 and you want 30% food cost.
Minimum price excl. VAT: €9.00 / 0.30 = €30.00
Menu price incl. VAT: €30.00 × 1.09 = €32.70
You must charge at least €32.70 to hit 30% food cost.
Practical example: Restaurant De Smaak
Restaurant De Smaak wants to calculate the food cost of their popular salmon fillet. Let's walk through this step by step:
Menu price: €26.50 (incl. 9% VAT)
Selling price excl. VAT: €26.50 / 1.09 = €24.31
Ingredient breakdown:
- Salmon fillet 180g: €4.20 (€23.33 per kilo)
- Potatoes 200g: €0.40 (€2.00 per kilo)
- Vegetable mix 150g: €1.05 (€7.00 per kilo)
- Butter sauce 50ml: €0.60 (€12.00 per liter)
- Lemon + herbs: €0.25
- Olive oil for cooking: €0.15
Subtotal ingredients: €6.65
Trimming loss and waste (8%): €0.53
Total ingredient costs: €7.18
Food cost calculation:
(€7.18 / €24.31) × 100 = 29.5%
This falls within the desired range of 28-32% for this type of restaurant.
Avoiding common mistakes
These mistakes show up constantly in cost calculations. I've seen them kill more restaurants than bad reviews — one of the most common blind spots in kitchen management:
1. Calculating with price incl. VAT
Your food cost then appears lower than reality. This leads to wrong decisions about price adjustments.
2. Forgetting ingredients
Especially small things like oil, herbs, bread, and garnish get overlooked. These can together cost €0.50-1.50 per dish.
3. Ignoring trimming loss
You pay more per kilo than the purchase price shows. With fresh products like meat, fish, and vegetables, this can mean 5-15% extra costs.
4. Estimating portions instead of weighing
Weigh occasionally what actually goes on the plate. Chefs often give more generous portions than planned, especially with expensive ingredients.
5. Not updating purchase prices
Ingredient prices fluctuate, especially for meat, fish, and seasonal vegetables. Check your cost prices at least monthly.
Optimizing food cost
If your food cost turns out too high, you have several options:
Increase selling price
This is the fastest solution, but can scare off customers. Test small increases of 5-10% first.
Adjust recipe
Replace expensive ingredients with cheaper alternatives without sacrificing quality. For example: replace beef tenderloin with flank steak in a stew.
Optimize portion sizes
Small adjustments create big impact. 20 grams less meat per portion quickly saves €1-2 per dish.
Optimize purchasing
Negotiate with suppliers, buy seasonal products, or switch to other suppliers for better prices.
Tracking food cost in practice
Manual calculation eats up serious time. Many entrepreneurs use a food cost management system to calculate automatically. You enter your recipes and purchase prices, and immediately see your food cost per dish.
This way you can quickly spot which dishes cost too much and where your profit is leaking.
Final thoughts
Calculating food cost is essential for profitable dishes. Always use prices excluding VAT, count all ingredients including trimming loss, and aim for 28-35% food cost depending on your restaurant type. Regularly check your cost prices because purchase prices fluctuate, and occasionally weigh portions to ensure practice matches your calculations. With this approach, you maintain control over your margins and ensure healthy business operations.
How do you calculate food cost? (step by step)
Gather all ingredients and prices
Make a list of ALL ingredients that go on the plate. Even small things like oil, herbs, and bread. Look up the current purchase prices with your suppliers.
Calculate the cost per portion
Add up all ingredient costs for one portion. Don't forget trimming loss - you pay more per kilo than the purchase price if you have to peel or fillet.
Determine your selling price excl. VAT
Divide your menu price by 1.09 (at 9% VAT) to get the price excl. VAT. Use this price for further calculations.
Calculate your food cost percentage
Divide the ingredient costs by the selling price excl. VAT and multiply by 100. A percentage between 28-35% is common for most restaurants.
✨ Pro tip
Test your food costs on 3 different weekday services before finalizing any new menu item. Kitchen staff portion differently during rush periods, and what looks like 28% food cost on paper often becomes 35% in real service conditions.
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Frequently asked questions
Should I include VAT in my food cost calculation?
No, always calculate with the selling price EXCLUDING VAT. You pass the VAT on to the customer, so it doesn't count toward your margin. Divide your menu price by 1.09 to get excl. VAT.
How do I handle trimming loss in expensive proteins like beef tenderloin?
Add 10-15% to your raw ingredient cost for high-end cuts. If you pay €40/kg for tenderloin, factor in €44-46/kg for your calculations. Track your actual yield over a week to get precise numbers for your kitchen.
What if my signature dish has 42% food cost but customers love it?
Keep it as a loss leader but balance your menu. Make sure your other dishes run 25-30% food cost to compensate. You can also slightly reduce the portion or find a cheaper protein substitute that maintains the same flavor profile.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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