Menu revisions can make or break your restaurant's profitability. After tweaking prices and swapping dishes, you need to verify each category still hits your target margins. Here's your roadmap to calculating what every section contributes to your bottom line.
Gather all new data per category
For accurate calculations, collect this data for each category:
- New selling prices (as on your menu, incl. VAT)
- Ingredient costs per dish (including garnish and sauces)
- Number of portions sold per category (last month)
- Total revenue per category
💡 Example:
Main courses after revision:
- Steak: €32.00 (was €28.00) - ingredients €9.50
- Salmon: €26.00 (was €24.00) - ingredients €8.20
- Pasta: €18.00 (new dish) - ingredients €5.10
Sold last month: 120 steaks, 85 salmon, 95 pasta
Calculate margin per individual dish
Start by figuring out the margin for each dish in a category. Here's the formula:
Margin per portion = Selling price excl. VAT - Ingredient costs
Remember: your menu price includes 9% VAT. For food calculations: Price excl. VAT = Menu price ÷ 1.09
💡 Example calculation:
Steak €32.00 incl. VAT:
- Price excl. VAT: €32.00 ÷ 1.09 = €29.36
- Ingredient costs: €9.50
- Margin per portion: €29.36 - €9.50 = €19.86
Margin: €19.86 per steak
Calculate total margin per category
Next, multiply each dish's margin by portions sold. Then add up all dishes in that category:
Total category margin = Σ (Margin per portion × Quantity sold)
💡 Example main courses:
- Steak: €19.86 × 120 = €2,383.20
- Salmon: €15.60 × 85 = €1,326.00
- Pasta: €10.56 × 95 = €1,003.20
Total main course margin: €4,712.40
Calculate margin percentage per category
The margin percentage reveals what portion of revenue stays as profit after ingredient costs. This number's essential for comparing different categories:
Margin percentage = (Total margin ÷ Total revenue excl. VAT) × 100
⚠️ Note:
Always use revenue excluding VAT. Otherwise your margins will look artificially low.
For our main course example:
- Total revenue incl. VAT: (€32×120) + (€26×85) + (€18×95) = €8,760
- Total revenue excl. VAT: €8,760 ÷ 1.09 = €8,037
- Margin percentage: (€4,712 ÷ €8,037) × 100 = 58.6%
Compare categories and draw conclusions
Build a summary of all categories with their margin percentages. After managing kitchen operations for nearly a decade, I've seen these typical margins in hospitality:
- Main courses: 65-75% margin
- Starters: 70-80% margin
- Desserts: 75-85% margin
- Alcoholic beverages: 75-82% margin
💡 Example analysis:
- Main courses: 58.6% (too low - ingredients too expensive)
- Starters: 74% (solid performance)
- Desserts: 81% (excellent)
Action: Raise main course prices or reduce ingredient costs
Account for mix effects
Watch which dishes within each category sell most frequently. A dish with weak margins but high volume can tank your entire category performance.
So calculate the weighted average margin per category. Dishes with higher sales get more weight in your final numbers.
⚠️ Note:
A category might look decent on average, but if your top seller has terrible margins, you're still losing money. Always examine the sales mix.
How do you calculate margin per category after menu revision?
Gather all new data
Note down for each dish the new selling price, exact ingredient costs, and number of portions sold from the last month. Make sure you include all costs: main ingredients, garnish, sauces, and oil.
Calculate margin per dish
Subtract ingredient costs from each selling price (excl. VAT). This gives you the margin per portion. Multiply this by the number of portions sold to get the total margin per dish.
Add up margins per category
Sum all margins of dishes within one category (starters, main courses, desserts). Divide this by the total revenue excl. VAT of that category and multiply by 100 for the margin percentage.
✨ Pro tip
Analyze your 3 highest-volume dishes within 14 days of any menu revision. These workhorses determine your entire category's profitability—if they're bleeding money, your revision failed.
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 margin calculation?
No, always calculate with prices excluding VAT. VAT isn't your money—it goes straight to the tax authority. For food that's 9%, so divide your menu price by 1.09.
What is a good margin for main courses?
Main courses typically hit 65-75% margins. Below that means your ingredients cost too much or prices are too low. Anything above 75% is outstanding.
How often should I check margins per category?
Review monthly, or right after any menu changes. Ingredient prices shift constantly, so your margins can slowly erode without warning.
What if one category is underperforming?
Dig into which specific dishes are dragging down that category's numbers. Usually it's just one or two problem dishes causing the issue. Fix those prices or cut them from the menu entirely.
⚠️ EU Regulation 1169/2011 — Allergen Information — https://eur-lex.europa.eu/eli/reg/2011/1169/oj
The allergen information on this page is based on EU Regulation 1169/2011. Recipes and ingredients may vary by supplier. Always verify current allergen information with your supplier and communicate this correctly to your guests. KitchenNmbrs is not liable for allergic reactions.
In the UK, the FSA enforces allergen regulations under the Food Information Regulations 2014.
📚 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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