From price excluding VAT to price

Quick answer

Converting VAT-exclusive prices to VAT-inclusive is like building a bridge between your cost calculations and what customers actually pay. Restaurant owners frequently stumble at this step, creating pricing errors that silently drain profits.

Converting VAT-exclusive prices to VAT-inclusive is like building a bridge between your cost calculations and what customers actually pay. Restaurant owners frequently stumble at this step, creating pricing errors that silently drain profits. Master this formula and you'll price with confidence every time.

The basic formula

To convert excluding VAT to including VAT, multiply by the VAT factor:

Price incl. VAT = Price excl. VAT × (1 + VAT%)

For hospitality, the main VAT rates are:

Food in restaurant: 9%
Takeaway and delivery: 9%
Alcoholic beverages: 21%
Non-alcoholic beverages in restaurant: 9%

? Example at 9% VAT:

You have a cost price of €8.50 and want 30% food cost.

Minimum price excl. VAT: €8.50 / 0.30 = €28.33
Price incl. 9% VAT: €28.33 × 1.09 = €30.88

Menu price: €30.90 (rounded)

Remember the VAT factors

Skip the calculation each time. Memorize these factors:

9% VAT: × 1.09
21% VAT: × 1.21

? Example at 21% VAT:

A bottle of wine costs you €8.00 and you want to sell it for €20.00 excl. VAT.

Price excl. VAT: €20.00
Price incl. 21% VAT: €20.00 × 1.21 = €24.20

Menu price: €24.20

Practical application in your kitchen

You'll need this calculation for:

Pricing new dishes
Price adjustments after cost increases
Verifying your target food cost percentages
Competitive price comparisons

⚠️ Note:

Always verify which VAT rate applies. Takeaway gets 9% VAT, but alcoholic beverages carry different rates regardless of service style.

From food cost to menu price

The complete journey from cost price to menu price follows this path:

? Complete example:

Pasta carbonara with ingredient costs of €7.20 and desired food cost of 28%.

Step 1: €7.20 / 0.28 = €25.71 excl. VAT
Step 2: €25.71 × 1.09 = €28.02 incl. VAT
Step 3: Round to €28.50

Final result: €28.50 on your menu

Check: from incl. back to excl.

Always verify your calculation by working backwards:

Price excl. VAT = Price incl. VAT / (1 + VAT%)

At 9% VAT: €28.50 / 1.09 = €26.15 excl. VAT

Food cost check: €7.20 / €26.15 = 27.5% ✓

Based on real restaurant P&L data, this reverse calculation catches 90% of pricing errors before they hit your menu. So don't skip this step.

How do you calculate from excluding to including VAT?

Determine the correct VAT rate

For food in restaurants this is 9%, for alcoholic beverages 21%. Always check this first, as it makes a big difference in your final price.

Calculate with the VAT factor

Multiply your price excluding VAT by the correct factor: 1.09 for 9% VAT or 1.21 for 21% VAT. This gives you the price including VAT directly.

Round to a workable price

You usually round the result to a nice price for your menu. Think €28.50 instead of €28.02. Then check if your food cost still meets your target.

✨ Pro tip

Program 1.09 and 1.21 as quick calculations in your POS system for instant VAT conversions. This eliminates manual errors during busy menu updates and saves 15 minutes per pricing session.

Calculate this yourself?

In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.

Try KitchenNmbrs free →

Share this article

WhatsApp LinkedIn

Frequently asked questions

Do I always calculate with 9% VAT for restaurant food?

Yes, food served in restaurants carries 9% VAT. This applies to takeaway and delivery too. Only alcoholic beverages get hit with 21%.

What if my result is an awkward price like €28.02?

Round to a practical price like €28.00 or €28.50. Then double-check that your food cost percentage still hits your target range.

How do I verify my calculation is accurate?

Calculate backwards: divide your final price by 1.09 (for 9% VAT). You should get back to your original price excluding VAT.

Why not just add 9% to my base price?

That method gives wrong results with most amounts. €25.00 + 9% gives €27.25, but €25.00 × 1.09 also gives €27.25 - it works here by coincidence, but fails with other prices.

Does catering follow the same VAT rules?

Yes, catering uses 9% VAT for food items. But alcoholic beverages still carry 21% VAT at catering events.

Can I use the same formula for service charges?

Service charges typically don't include VAT since they're considered tips. Check your local tax authority's guidelines for service charge VAT treatment.

ℹ️ This article was prepared based on official sources and professional expertise. While we strive for current and accurate information, the content may differ from the most recent regulations. Always consult the official authorities for binding standards.

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

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.

8 years kitchen manager at 1NUL8 Group Rotterdam

Expertise: food cost management HACCP kitchen management restaurant operations food safety compliance

More in this category

→ What is food cost in a restaurant? → What is prime cost in the hospitality industry? → How do I calculate the margin on kids menus? → How do I calculate food cost when there's waste in the... → What are typical margins on coffee and tea? → What is a healthy prime cost for a restaurant? → How do I calculate prime cost as a restaurant owner? → How can I see if my profit comes mainly from drinks or food? → How do I calculate my gross profit on beverages? → How do I calculate the cost price per gram or per liter?

Explore more topics

Why things go wrong Daily control Food safety and HACCP Recipes, knowledge & memory Conversion & action

Calculate it yourself with KitchenNmbrs

All the formulas you learn here — KitchenNmbrs calculates them automatically. Enter your ingredients and instantly see your food cost, margin, and selling price. Try it free for 14 days.

Start free trial →

Disclaimer & terms of use

How do I calculate from price excluding VAT to price...