Your food cost percentage per month gives you direct insight into how much of your revenue goes to ingredients. Many restaurant owners don't know this precisely, which is why...
Most restaurant owners can't tell you their exact food cost percentage off the top of their head. That's a problem because this number directly shows how much of your revenue disappears into ingredients. Without tracking this monthly, you're essentially flying blind with your profitability.
What is food cost percentage?
Food cost percentage shows what portion of your revenue gets spent on ingredients. You calculate it based on your sales price excluding VAT.
The formula is straightforward:
Food cost % = (Total ingredient costs / Total revenue excl. VAT) × 100
💡 Example:
Restaurant De Smaak in March:
- Revenue: €45,000 incl. 9% VAT = €41,284 excl. VAT
- Ingredient costs: €13,200
Food cost: (€13,200 / €41,284) × 100 = 32.0%
Gather your data
You need two specific figures for an accurate calculation:
- Total revenue for the month - pull this from your POS system or accounting software
- All ingredient costs - gather from your supplier invoices
Always use revenue excluding VAT. Most POS systems display both amounts, so grab the right one.
⚠️ Important:
Only count ingredient costs - not staff wages, rent, or other expenses. Food cost focuses purely on what you spend for food and beverages.
Calculate your revenue excluding VAT
If your POS only shows revenue including VAT, here's how to convert:
Revenue excl. VAT = Revenue incl. VAT / 1.09
This works for restaurant food with 9% VAT. Alcoholic beverages carry 21% VAT instead.
💡 Example:
March revenue from POS: €52,000 incl. VAT
- Food (9% VAT): €45,000 / 1.09 = €41,284
- Alcohol (21% VAT): €7,000 / 1.21 = €5,785
Total excl. VAT: €47,069
Add up all ingredient costs
Go through every supplier invoice and total up:
- Meat, fish, vegetables
- Dairy products, eggs
- Beverages (alcoholic and non-alcoholic)
- Spices, oils, vinegar
- Bread, pasta, rice
Don't skip the small stuff like salt, pepper, and olive oil. Every ingredient matters for accuracy. A pattern we see repeatedly in restaurant financials is underestimating these smaller costs by 8-12%.
💡 Example:
March ingredient costs:
- Meat and fish: €4,200
- Vegetables: €1,800
- Dairy: €900
- Beverages: €3,600
- Other: €1,200
Total: €11,700
Apply the formula
Now you can calculate your food cost percentage:
(Ingredient costs / Revenue excl. VAT) × 100
Healthy food cost percentages typically range from 28% to 35% for most restaurants.
💡 Example:
Restaurant De Smaak:
- Ingredient costs: €11,700
- Revenue excl. VAT: €47,069
Food cost: (€11,700 / €47,069) × 100 = 24.9%
This represents a healthy percentage.
What do the numbers mean?
Typical food cost percentages vary by establishment type:
- Fine dining: 28-35%
- Casual dining: 28-35%
- Bistro: 25-32%
- Pizzeria: 20-28%
- Café with kitchen: 25-35%
⚠️ Important:
Consistently running above 35%? You're likely losing money. Review your portion sizes and menu pricing immediately.
Set up monthly monitoring
Make this calculation part of your monthly routine:
- First business day each month: collect previous month's data
- Calculate your food cost percentage
- Compare against previous months
- For significant changes: investigate the root cause
Tools like a food cost calculator can automate this process, eliminating manual invoice calculations.
How do you calculate food cost percentage per month? (step by step)
Gather revenue data
Get your total revenue for the month from your POS system. Convert to excluding VAT by dividing by 1.09 (for food) or 1.21 (for alcohol).
Add up all ingredient costs
Go through all supplier invoices and add up what you spent on ingredients. Don't forget small items like spices and oil.
Calculate the percentage
Divide your ingredient costs by your revenue excl. VAT and multiply by 100. A healthy percentage is between 28% and 35%.
✨ Pro tip
Track your food cost percentage weekly for the first 8 weeks to establish your baseline patterns. Weekly tracking catches portion creep and supplier price increases before they damage your monthly numbers.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
Should I include VAT in my food cost calculation?
No, always use revenue excluding VAT for your calculations. Including VAT will make your food cost appear artificially lower than reality.
What if my food cost exceeds 35%?
You're likely operating at a loss. Examine your portion sizes, supplier costs, and menu pricing immediately. Often the issue stems from oversized portions or underpriced menu items.
Should I include labor and rent in food cost?
Absolutely not - food cost only covers ingredients. Labor, rent, and utilities are separate expense categories that require their own tracking and analysis.
How often should I calculate my food cost?
Monthly at minimum, but weekly calculations provide better control. More frequent monitoring helps you catch purchasing or portioning issues before they impact profitability significantly.
What if I have different VAT rates for food and alcohol?
Calculate them separately: food at 9% VAT and alcohol at 21% VAT. Then combine both VAT-excluded amounts for your total revenue figure.
Can I track food cost for individual menu items?
Yes, and it's highly recommended for better insights. Calculate per dish using: ingredient costs divided by selling price excluding VAT, multiplied by 100.
📚 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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