Most restaurant owners think they know their food costs, but they're quietly bleeding money on every plate. You might estimate that pasta dish costs around €5 to make, but the real number could be €7.50 — turning your profit into a loss.
What exactly is food cost?
Food cost shows how much of every euro a customer pays actually goes toward ingredients. Sell a pasta for €20 with €6 worth of ingredients? That's a 30% food cost.
? Example:
You sell a steak for €32.00 (incl. 9% VAT):
- Selling price excl. VAT: €29.36
- Ingredient costs: €10.50
Food cost: (€10.50 / €29.36) × 100 = 35.8%
The correct formula
Here's the calculation you need:
Food cost % = (Ingredient costs / Selling price excl. VAT) × 100
⚠️ Watch out:
Always use the price WITHOUT VAT. Your menu shows prices including 9% VAT. Calculate with VAT included and your food cost looks artificially low.
What do you include in ingredient costs?
Count everything that touches the plate:
- Main ingredients (meat, fish, vegetables)
- Garnishes and side dishes
- Sauces and dressings
- Oil, butter, herbs
- Decoration and microgreens
? Example ingredient costs:
For a salmon dish:
- Salmon fillet 200g: €7.20
- Potatoes: €0.80
- Vegetables: €1.50
- Hollandaise sauce: €0.90
- Oil, butter, herbs: €0.60
Total: €11.00
What is a good food cost?
Most successful restaurants hit between 28% and 35%. Your target depends on your concept:
- Fine dining: 28-35%
- Bistro/brasserie: 25-32%
- Pizzeria: 20-28%
- Casual dining: 28-35%
Consistently above 35%? You're probably losing money on that dish.
Why is food cost so important?
Food cost directly impacts your bottom line. Based on real restaurant P&L data, even a 5 percentage point difference can cost you thousands annually:
? Impact example:
Restaurant with €500,000 annual revenue:
- At 28% food cost: €140,000 to ingredients
- At 33% food cost: €165,000 to ingredients
Difference: €25,000 less profit per year
How do you track food cost?
Many owners rely on Excel spreadsheets, but manual tracking eats time and invites errors. Automated systems calculate your food cost per dish by connecting recipes with purchase data.
But tracking at all beats flying blind. Too many restaurants operate on instinct while their numbers tell a completely different story.
How to calculate food cost? (step by step)
Gather all ingredient costs
Make a list of all ingredients in the dish. Also include small things like oil, herbs and garnish. Calculate what each ingredient costs per portion.
Calculate the selling price excluding VAT
Take your menu price and divide by 1.09 (for 9% VAT). A dish of €32.00 becomes €29.36 excl. VAT. This is the amount you need to calculate with.
Apply the formula
Divide your total ingredient costs by the selling price excl. VAT and multiply by 100. The result is your food cost percentage. Check if this is between 28-35%.
✨ Pro tip
Calculate food cost on dishes that represent 60% of your sales volume first — usually your top 8-12 items. Fix these and you'll control most of your ingredient spend.
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?
What if my food cost exceeds 35%?
Do I also include staff and rent in food cost?
How do seasonal price changes affect my food cost tracking?
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.
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