Basics · May 2026

Food Cost Formula: How to Calculate Food Cost % (With Examples)

Food cost is the number that decides whether a busy night actually makes money. Here's the formula, a worked example, and how to keep it accurate once you have more than a handful of dishes.

What food cost % means, and why it matters

Your food cost percentage is the share of a dish's selling price that goes toward the ingredients used to make it. If a plate sells for $10 and the ingredients cost $3, your food cost is 30%. The rest covers labour, rent, utilities, equipment, waste, and, eventually, profit.

It matters because hospitality runs on thin margins. After every cost is paid, a typical full-service restaurant keeps something like 3-5% as net profit. When food cost drifts a few points the wrong way, that margin can vanish entirely. A few cents per plate, multiplied across a service and a year, is the difference between a healthy business and one that's quietly bleeding.

The food cost formula

The formula itself is simple:

Food cost % = (Cost of ingredients ÷ Menu selling price) × 100

A worked example. Say you're costing a roast chicken dish. You add up every ingredient at its true cost, chicken, oil, herbs, the sides, the garnish, a touch of the sauce sub-recipe, and it comes to $2.45 per plate. You sell it for $9.00. Then:

(2.45 ÷ 9.00) × 100 = 27.2%

A 27% food cost on that plate. Flip the formula and you can work the other way too: if you want to hit a target food cost, divide the ingredient cost by your target. A $2.45 plate at a 28% target wants a selling price of 2.45 ÷ 0.28 = $8.75.

Plate cost vs period food cost

There are two food costs worth knowing, and they answer different questions.

• Plate cost (theoretical). What a dish should cost based on its recipe and current ingredient prices. This is what the formula above gives you, the number you price your menu against.
• Period food cost (actual). What you actually spent over a week or month: (opening stock + purchases − closing stock) ÷ sales. This is the real-world number, and it includes waste, over-portioning, theft and spoilage.

The gap between the two is where money leaks. If your plates theoretically cost 27% but your actual period cost is 33%, those six points are walking out the back door, usually as waste or generous portioning. Knowing your theoretical number is the only way to spot the gap.

What's a "good" food cost %?

Most full-service restaurants aim for 28-35%, but "good" depends entirely on the concept. There's no single right number, only the right number for your model:

• Fine dining often runs higher food cost (35%+) because the value is in premium ingredients and the menu price carries it.
• Cafés and bars can sit lower (20-28%), coffee and drinks have high margins that pull the average down.
• Pizza and high-volume concepts may target the low twenties, leaning on dough and cheese economics plus speed.

The point isn't to chase a magic percentage. It's to know your number, price to it deliberately, and watch it move when supplier prices change.

Why a spreadsheet goes stale

The formula is easy. Keeping it true is the hard part. The moment you build recipes from sub-recipes, a sauce used in five dishes, a stock used in the sauce, a spreadsheet becomes a web of fragile cell references. One supplier raises the price of butter, and every dish touching that sauce is now wrong. You either re-enter prices by hand across dozens of tabs, or you quietly run on numbers that stopped being accurate weeks ago.

This is exactly what Plate Pro's cost cascade is built for. Ingredients feed recipes, recipes feed sub-recipes, and those feed your menu. Change one supplier price and every recipe, sub-recipe and menu item re-costs itself instantly, so your food cost % and gross profit are always live, never a stale snapshot. It also keeps a price history per ingredient with the % change, so you catch creep before it eats your margin.

If you're weighing the two approaches, we wrote a side-by-side: food cost calculator vs. spreadsheet. And if you want the bigger picture of how Plate Pro handles costing, start on the home page.

Get your numbers live

Knowing the formula is step one. Keeping it accurate across a real menu, as prices move, is the job. Plate Pro does the cascade for you, on your Mac, iPhone and iPad, with no account and no tracking. Cost a dish, set a target, and see your true margin before it hits the menu.