Food cost and prime cost are often confused, but the difference is crucial for your profit. Food cost only looks at ingredients, prime cost also includes...
Most restaurant owners obsess over food cost percentages while completely ignoring the number that actually determines their profit. Food cost tracks ingredient expenses, but prime cost reveals your true kitchen profitability by including labor. Understanding both metrics means the difference between thinking you're profitable and actually being profitable.
What is food cost?
Food cost represents the percentage of your selling price consumed by ingredients. Every component that touches the plate counts: proteins, vegetables, sauces, garnishes, cooking oils, and seasonings.
💡 Food cost example:
Pasta carbonara for €18.50 (incl. 9% VAT)
- Selling price excl. VAT: €16.97
- Ingredient costs: €5.10
Food cost: (€5.10 / €16.97) × 100 = 30.1%
Food cost formula:
Food cost % = (Ingredient costs / Selling price excl. VAT) × 100
What is prime cost?
Prime cost combines ingredient expenses with direct kitchen labor. This includes wages for your chef, sous chef, line cooks, and prep staff. Front-of-house wages don't count here.
💡 Prime cost example:
Restaurant with €50,000 monthly revenue
- Ingredients: €15,000 (30% food cost)
- Kitchen team wages: €12,000
- Total prime cost: €27,000
Prime cost: (€27,000 / €50,000) × 100 = 54%
Prime cost formula:
Prime cost % = ((Ingredients + Kitchen wages) / Revenue) × 100
The key difference
Food cost applies to individual dishes. Prime cost measures your entire operation's efficiency. You'll use food cost for menu engineering and pricing decisions. Prime cost tells you if your restaurant model actually works.
⚠️ Watch out:
Excellent food cost percentages mean nothing if your kitchen is overstaffed. High labor costs will destroy margins regardless of ingredient efficiency. Prime cost prevents this blind spot.
Benchmarks for both numbers
Based on real restaurant P&L data, these ranges indicate healthy operations:
- Food cost: 28-35% works for most concepts
- Prime cost: 50-60% maintains profitability
- Kitchen wages: 15-25% of total revenue
Prime costs exceeding 65% signal trouble. You'll need higher menu prices or improved kitchen productivity to survive.
💡 Problem example:
Bistro with good food cost but high prime cost
- Food cost: 32% (good)
- Kitchen wages: 28% (too high)
- Prime cost: 60% (just right)
Solution: schedule more efficiently or raise prices
When do you use which number?
Food cost guides these decisions:
- Setting menu prices
- Recipe development
- Supplier negotiations
- Portion control
Prime cost drives these choices:
- Staff scheduling
- Profitability analysis
- Hiring decisions
- Financial reporting
Keep an eye on both numbers
Both metrics matter for sustainable success. Food cost alone creates a false sense of security. Perfect ingredient costs can't save you from excessive labor expenses.
Modern restaurant management requires tracking both simultaneously. You need visibility into per-dish profitability and overall kitchen efficiency to make informed decisions.
How do you calculate food cost and prime cost?
Calculate your food cost per dish
Add up all ingredient costs for one portion. Divide this by your selling price excluding VAT and multiply by 100 to get the percentage.
Gather your kitchen labor costs
Add up all wages for your kitchen team: chef, sous chef, kitchen assistants. Not the servers or management. Use gross wages including employer contributions.
Calculate your prime cost percentage
Add ingredient costs and kitchen wages together. Divide this by your total revenue and multiply by 100. This gives you your prime cost percentage.
✨ Pro tip
Track your prime cost weekly during your first 90 days of operation, then monthly once stabilized. New restaurants often underestimate kitchen labor needs, and weekly monitoring prevents costly surprises.
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 the food cost calculation?
No, always calculate using the selling price excluding VAT. The price on your menu includes VAT, so divide by 1.09 to get the net amount.
Can I calculate prime cost per dish?
That's nearly impossible because kitchen wages can't be accurately allocated to specific dishes. Prime cost works as a restaurant-wide metric, not per-item.
What if my prime cost is good but individual dish margins seem low?
This suggests your high-margin items are subsidizing low-margin dishes. Analyze your menu mix and consider repricing or removing unprofitable items.
📚 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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