How to calculate a restaurant's food cost

The food cost formula

Food cost (%) = dish ingredient cost ÷ pre-tax selling price × 100. For example, a dish whose ingredients cost 3 € sold at 12 € pre-tax has a food cost of 25%.

The markup factor is the inverse: pre-tax selling price ÷ ingredient cost. Here, 12 ÷ 3 = 4. We say you apply a markup of 4.

Step 1: calculate the ingredient cost

List each ingredient with its quantity and unit purchase price (per kg, per liter, per item). Multiply quantity by unit price, then add it all up. Don't forget to factor in waste (trim, scraps, cooking loss) by increasing the quantity you actually buy.

Step 2: set the selling price

Choose a target food cost (often 28-32%). Divide the ingredient cost by this target to get the pre-tax price, then add VAT (10% for dine-in in France) for the tax-inclusive price shown to customers.

Our food cost generator runs all these calculations automatically and exports the recipe sheet to Excel.