Costs & profit
How to calculate food cost for your restaurant or café (with real examples)
Youssef Manana8 min readUpdated 29 October 2026In short
- Food cost % = ingredient cost ÷ selling price before tax × 100.
- Include yield: if 1 kg of chicken gives you 750 g ready to serve, your real cost is higher than the invoice.
- Calculate it per dish (to set prices) and per month (to see what is really happening).
- As a guide, many cafés run at 20–30% and many restaurants at 28–35%.
You can be busy every day and still make very little. Very often the reason is food cost: how much the ingredients of what you sell cost you. If you don’t measure it, you don’t know whether your prices make money or give it away on every plate.
This guide shows you, step by step and with real numbers, how to calculate it per dish, how to include waste, how to set the right price and how to measure it every month. It is the same method I used to set up and run the food operation of a Dubai attraction with more than 3,000 visitors a day.
What is food cost?
Food cost is the share of your sales that goes on ingredients. If a dish sells for $20 and its ingredients cost $6, your food cost is 30%: for every $100 you take, $30 goes on food.
Food cost % = ingredient cost ÷ selling price before tax × 100
It does not include rent, wages or utilities. Those matter too, but food cost is the number that moves most from day to day and the easiest one to improve quickly.
Step 1: write a recipe card for every dish
A recipe card lists every ingredient in a dish with the exact quantity and what each one costs you. Without it, every cook serves something different and your cost changes every day.
- List every ingredient, including small ones (sauces, oil, napkins, packaging for takeaway).
- Weigh the amount that goes on one plate. Don’t guess: use a scale.
- Take the purchase price from your latest invoice and turn it into a price per gram or millilitre.
- Multiply quantity by unit price and add everything up.
Step 2: include waste and yield
Almost no ingredient is used 100%. Chicken loses weight when trimmed and cooked, milk stays in the jug, vegetables are peeled. What you actually serve is your yield.
Amount to buy = amount served ÷ yield
Example: you serve 120 g of cooked chicken and the yield is 75%. 120 ÷ 0.75 = 160 g of raw chicken.
How to measure your yield: weigh 1 kg of the product as delivered, prepare it as usual and weigh it again. If 750 g are left, your yield is 75%. Do this for your 5 most expensive ingredients.
Step 3: use the price before tax
If your menu prices include sales tax or VAT, that money is not yours. Food cost is calculated on the price before tax. Divide the menu price by 1 + the tax rate (for example, by 1.05 for 5% VAT).
Example 1: a cappuccino
| Ingredient | Quantity | Purchase price | Cost |
|---|---|---|---|
| Coffee beans | 18 g | $28 per kg | $0.50 |
| Milk (200 ml + 10% lost in the jug) | 220 ml | $1.20 per litre | $0.26 |
| Sugar, stirrer and napkin | 1 set | — | $0.15 |
| Total cost | $0.91 |
The cappuccino sells for $4.50 before tax.
Food cost = $0.91 ÷ $4.50 × 100 = 20.2%
A healthy number for a café. Drinks often have a lower food cost than food, which is why many owners track them separately.
Example 2: a chicken sandwich
| Ingredient | Quantity | Purchase price | Cost |
|---|---|---|---|
| Chicken breast (120 g cooked, 75% yield) | 160 g raw | $9 per kg | $1.44 |
| Artisan bread | 1 piece | $0.45 each | $0.45 |
| Cheese | 30 g | $14 per kg | $0.42 |
| Tomato and lettuce | — | — | $0.25 |
| Sauce | — | — | $0.10 |
| Total cost | $2.66 |
It sells for $8.95 before tax.
Food cost = $2.66 ÷ $8.95 × 100 = 29.7%
Step 4: work out the right price
Price before tax = dish cost ÷ target food cost
With a 28% target: 2.66 ÷ 0.28 = $9.50. That is only $0.55 more per sandwich, but at 300 sandwiches a month it is $165 more profit every month for the same work.
If a big price rise worries you, do it in two steps, or trim the most expensive ingredient slightly (for example 110 g of chicken instead of 120 g) and improve the presentation. Then check how many you sell the following week.
Step 5: measure your real food cost every month
Recipe cards tell you what each dish should cost. In real life there is waste, over-portioning, unrecorded staff meals and over-ordering. To see what really happened, use your stock counts:
Real food cost = (opening stock + purchases − closing stock) ÷ sales before tax × 100
| Item | Value |
|---|---|
| Stock at the start of the month | $8,200 |
| + Purchases this month | $24,600 |
| − Stock at the end of the month | $7,300 |
| = What you really used | $25,500 |
| Sales this month before tax | $79,500 |
| Real food cost | 32.1% |
If your recipe cards say 29% and the real month says 32.1%, those 3 points are money leaking somewhere: waste, portions, theft or ordering mistakes. That is the number to chase.
What is a good food cost?
| Type of business | Typical food cost |
|---|---|
| Café or coffee bar | 20% – 30% |
| Bakery and pastry | 25% – 35% |
| Casual or quick-service restaurant | 28% – 35% |
| Delivery-only (cloud) kitchen | 28% – 33%, plus app commissions |
The point is not to copy a number but to set your own target and measure yourself against it every week.
The 5 most common mistakes
- Using the price that includes tax. It makes you think you earn more than you do.
- Forgetting yield. Chicken, meat and vegetables cost more than the invoice says.
- Not updating prices. If your supplier raises the price of milk and you don’t update the card, your cost rises without you noticing.
- Not weighing portions. “A handful” is different for every person and every shift.
- Calculating it once and forgetting it. Check food cost every week, or at least every month.
Make it easier with a calculator
Doing this by hand for a whole menu takes time. That is why I made a free Google Sheets calculator: enter the ingredients, quantities and prices, and it shows the cost per plate, the food cost and the lowest price that hits your target. Get it free here.
Get the free Food Cost Calculator
Enter your ingredients and prices, and see the cost per plate, your food cost and the lowest price that hits your target. Works in Google Sheets.
Frequently asked questions
Is food cost calculated with or without tax?
Without tax. Tax collected on sales is not your money, so divide the menu price by 1 + the tax rate first, then calculate food cost on that amount.
How often should I calculate food cost?
Update each recipe card whenever an important purchase price changes. Calculate the real food cost of the business every week if you can, or at least every month, using your stock counts.
Are drinks calculated the same way?
Yes. Many businesses track beverage cost separately because it is usually lower than food. Tracking them apart shows you where a problem really is.
What should I do if my food cost is too high?
Check in this order: supplier prices, waste, portion sizes, over-ordering and food that leaves without being recorded. Then re-price the dishes that are below your target.
Does packaging count in food cost?
For takeaway and delivery items, include the packaging in that version’s recipe card, because it is a cost that goes out with every sale.
Youssef Manana
Founder of F&B Launch Lab
Former F&B and guest services team lead at one of Dubai’s busiest attractions (3,000+ visitors a day). I build the simple systems small restaurants and cafés need to control costs and run smooth shifts.
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