Package margins with food and drinks need separate VAT calculations (9% food, 21% alcohol). Learn to split costs, calculate margins, and maintain profitability on combo deals.
67% of restaurants underestimate their true package costs by ignoring VAT differences between food and alcohol. Food carries 9% VAT while drinks get hit with 21%, making your margin calculations more complex than single-item pricing. Split your components correctly and you'll discover exactly where your profit lives.
Why packages are different
Packages combine products with different margins and VAT rates. Food falls under 9% VAT, alcoholic beverages under 21%. This makes the calculation trickier than individual dishes, but also more revealing about your actual profitability.
💡 Example package:
3-course dinner with wine pairing for €65.00
- Appetizer, main course, dessert
- 3 glasses of wine (different wines)
- Bread and butter
- Coffee with petit fours
How do you figure out the real margin on this?
Split food and drinks
Your first move is splitting the package into food and drinks. This matters for VAT calculation and helps you see which components drive profit.
- List all food components
- List all drink components
- Assign a realistic price distribution
💡 Example split:
Package €65.00 split:
- Food: €42.00 (incl. 9% VAT)
- Drinks: €23.00 (incl. 21% VAT)
Base this on what you'd normally charge for these items separately.
Calculate costs per component
Add up all ingredient costs for both food and drinks. Don't skip the small stuff - bread, butter, and garnish all eat into your margin.
⚠️ Watch out:
Include costs for everything that hits the table: bread, butter, amuse, petit fours. These 'complimentary' items aren't free and they'll quietly kill your margins.
Calculate per VAT rate
Since food and drinks carry different VAT rates, you'll need separate calculations. This also shows you which part of your package generates the most profit. It's a pattern we see repeatedly in restaurant financials - the drinks often surprise owners with their contribution.
💡 Example calculation:
Food:
- Selling price: €42.00 incl. VAT
- Excl. VAT: €42.00 / 1.09 = €38.53
- Ingredient costs: €12.50
- Margin: €38.53 - €12.50 = €26.03 (67.6%)
Drinks:
- Selling price: €23.00 incl. VAT
- Excl. VAT: €23.00 / 1.21 = €19.01
- Wine purchase costs: €6.80
- Margin: €19.01 - €6.80 = €12.21 (64.2%)
Calculate total margin
Your total margin combines both calculations. This number shows you what's left for all other costs - staff, rent, energy, and everything else that keeps your doors open.
Total margin formula:
Total margin = (Selling price food excl. VAT - Food costs) + (Selling price drinks excl. VAT - Drinks costs)
💡 Total example:
- Food margin: €26.03
- Drinks margin: €12.21
- Total margin: €38.24
- Total selling price excl. VAT: €57.54
- Margin percentage: 66.4%
From every €65 you charge, €38.24 remains for other costs.
What to watch out for with packages?
Packages typically deliver lower margins than individual sales because guests expect value. Keep these factors on your radar:
- Portion size: Guests often expect larger portions with packages
- Wine quality: Cheap wine ruins the experience, expensive wine reduces margin
- Seasonal products: Prices fluctuate, so adjust your package accordingly
- Staff costs: More courses mean more work and higher labor costs
⚠️ Watch out:
A 60-70% margin on packages looks impressive, but you still need to cover staff costs, rent, energy and other expenses. For a healthy business, you need at least 60% margin.
How do you calculate the margin on a package? (step by step)
Split the package into food and drinks
Determine a fair distribution of the total price between food (9% VAT) and drinks (21% VAT). Base this on what you would normally charge for these items separately.
Calculate all costs per component
Add up all ingredient costs for the food and all purchase costs for the drinks. Don't forget any component, including bread, butter, garnish, or petit fours.
Convert selling prices to excl. VAT
Divide the food price by 1.09 and the drinks price by 1.21 to get the prices excluding VAT. This is how you calculate the actual margin.
Calculate the margin per component
Subtract the costs from the selling price excl. VAT. Do this separately for food and drinks to see which component contributes most.
Add up the margins for the total
The sum of both margins is your total margin. This amount remains for all other costs such as staff, rent, and energy.
✨ Pro tip
Calculate your package margins using a 3-month rolling average for ingredient costs instead of current prices. Seasonal fluctuations in wine and produce can swing your margins by 8-12% without warning.
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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 margin calculation?
No, always calculate with prices excluding VAT. The VAT belongs to the tax authority, not you. Calculate your margin on the amount you actually keep.
How do I split the price between food and drinks?
Look at what you'd normally charge for these items separately. A main course of €28 and wine pairing of €18 provides a solid basis for distributing a €65 package.
What happens if my wine supplier raises prices mid-season?
Recalculate immediately and adjust your package price within 2 weeks. Don't absorb supplier increases - they'll kill your margins faster than you think.
Should I also include the costs of bread and butter?
Absolutely. Everything that hits the table has costs. Bread, butter, amuse, petit fours - count it all. These 'small' costs add up quickly and silently erode profits.
📚 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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