Food gross profit is the difference between your selling price and your ingredient costs. This figure tells you how much you keep from each dish before you count other...
Food gross profit shows the difference between your selling price and ingredient costs. This number reveals how much you actually keep from each dish before other expenses eat into your margins.
What exactly is gross profit?
Gross profit represents what remains from each dish after subtracting ingredient costs. It's not your final profit yet - you've still got staff wages, rent, and utilities to cover. But it forms the foundation. Without solid gross profit margins on your food, profitability becomes nearly impossible.
💡 Example:
You sell a pasta carbonara for €18.50 incl. VAT:
- Selling price excl. VAT: €16.97
- Ingredient costs: €5.10
- Gross profit: €16.97 - €5.10 = €11.87
Per pasta you earn €11.87 gross
The formula for gross profit
The calculation stays straightforward:
Gross profit = Selling price (excl. VAT) - Ingredient costs
⚠️ Note:
Always calculate with the price excluding VAT. The price on your menu includes 9% VAT. Divide by 1.09 to get the price excl. VAT.
Calculate gross profit percentage
Converting your gross profit to a percentage proves more valuable. Then you can compare different dishes side by side:
Gross profit % = (Gross profit / Selling price excl. VAT) × 100
💡 Example:
Same pasta carbonara:
- Gross profit: €11.87
- Selling price excl. VAT: €16.97
- Gross profit %: (€11.87 / €16.97) × 100 = 70%
70% of your selling price remains for other costs
What are good gross profit margins?
For restaurants, typical gross profit margins fall within these ranges:
- 65-72%: Standard for most restaurants
- 70-75%: Good margins, provides room for other costs
- Below 65%: Probably too low, makes profitability difficult
- Above 75%: Excellent, but verify you're not overpriced
💡 Comparison example:
Two dishes on your menu:
- Steak: €32 excl. VAT, ingredients €12 → 62% gross profit
- Risotto: €18 excl. VAT, ingredients €4.50 → 75% gross profit
The risotto generates relatively more than the steak
Where does it often go wrong?
Many restaurant owners stumble over these common mistakes - something most kitchen managers discover too late:
- Forgotten ingredients: Missing oil, butter, spices, garnish from calculations
- Including VAT: Always use the price excluding VAT
- Ignoring trim loss: You buy whole fish but serve only fillet
- Inconsistent portions: Chef serves more than you calculated
Gross profit vs food cost
Gross profit and food cost represent opposite sides of the same coin:
- Food cost: What percentage goes to ingredients
- Gross profit: What percentage remains after ingredients
- Together: Always equals 100%
If your food cost hits 30%, then your gross profit sits at 70%. Both figures tell the same story from different perspectives.
How do you calculate gross profit? (step by step)
Calculate your selling price excluding VAT
Divide the price on your menu by 1.09. A dish of €27.50 becomes €27.50 / 1.09 = €25.23 excl. VAT.
Add up all ingredient costs
Calculate what all ingredients for one portion cost. Don't forget anything: main ingredients, garnish, sauces, oil, butter. Everything that goes on the plate.
Subtract ingredient costs from selling price
Gross profit = €25.23 - €7.80 = €17.43. For the percentage: (€17.43 / €25.23) × 100 = 69% gross profit.
✨ Pro tip
Calculate gross profit on your 3 highest-volume dishes every 2 weeks. These items drive 60% of your profitability.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
Was this article helpful?
Frequently asked questions
Should I include VAT in my gross profit calculation?
No, always calculate with the price excluding VAT. VAT is money you pass on to the tax authority, not your own income.
What is a good gross profit for a restaurant?
Between 65% and 72% is standard. Above 70% gives you more room for other costs like staff and rent.
How often should I check my gross profit?
Check your gross profit per dish at least monthly. Recalculate immediately when supplier prices change.
What if my gross profit is too low?
You can raise your selling price, find cheaper ingredients, or make your portions slightly smaller. First check if you've calculated everything correctly.
Is gross profit the same as my actual profit?
No, gross profit is what's left after ingredient costs. Your actual profit comes after deducting all other costs like staff, rent and energy.
Should I include trim loss in ingredient costs?
Yes, absolutely. If you buy whole fish but serve fillet, your actual costs are higher due to trim loss.
How do seasonal price fluctuations affect my gross profit calculations?
Seasonal changes can swing your margins by 10-15% or more. Track supplier prices weekly during peak seasons and adjust menu prices quarterly to maintain consistent gross profit margins.
📚 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.
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 →