Food Cost Percentage Calculator for UK Restaurants: Formula and Examples
Free UK food cost calculator guide: the formula, VAT handled correctly, worked examples per dish and per month, benchmarks and ways to cut food cost.
By the TablePort teamFacts checked 6 min read
Food cost percentage is the cost of the food you used, divided by your food sales excluding VAT, multiplied by 100. A UK restaurant that spends £30 on ingredients to make £100 of net food sales has a food cost of 30%. The catch is that menu prices include 20% VAT, so you must strip VAT out before you divide, or every dish looks cheaper than it is. You can run the sums in our free food cost calculator, and this guide explains what the numbers mean.
The formula, and the VAT trap
There are two ways to measure food cost, and you need both.
Per dish (theoretical): ingredient cost of one portion ÷ net selling price × 100.
Per period (actual): (opening stock + purchases − closing stock) ÷ net food sales × 100.
"Net" means excluding VAT. If you charge £16.50 on the menu and you are VAT-registered, you keep £13.75 and pass £2.75 to HMRC (20% standard rate on catering, see VAT Notice 709/1). Your ingredient invoices should also be entered excluding VAT, because you reclaim any VAT on purchases (most raw food is zero-rated anyway).
| Dish | Ingredient cost | Menu price (inc VAT) | Net price | Food cost % |
|---|---|---|---|---|
| Chicken Milanese | £4.10 | £16.50 | £13.75 | 29.8% |
| Same dish, wrong method (VAT left in) | £4.10 | £16.50 | £16.50 | 24.8% |
That five-point gap is the most common mistake in homemade spreadsheets. It makes a dish look healthy when it is not.
Worked example: cost per dish
Cost every ingredient at the price you actually pay per usable unit, not the pack price.
| Ingredient | Quantity | Cost |
|---|---|---|
| Chicken breast, flattened | 180g | £1.62 |
| Breadcrumbs, egg, flour | 1 portion | £0.38 |
| Rocket and tomato salad | 1 portion | £0.65 |
| Lemon, parmesan, dressing | 1 portion | £0.55 |
| Oil, seasoning, garnish | 1 portion | £0.20 |
| Sauce | 1 portion | £0.70 |
| Total | £4.10 |
Net price £13.75, so food cost is £4.10 ÷ £13.75 = 29.8%, gross profit is 70.2%, and each plate leaves £9.65 in cash before labour and overheads. For the reverse calculation (which menu price hits a target), see our GP calculator guide.
Yield and trim
Raw cost is not plate cost. If you buy sirloin at £18 per kg and lose 20% to trimming and cooking, the usable cost is £18 ÷ 0.80 = £22.50 per kg. A 200g portion costs £4.50, not the £3.60 the invoice suggests. Do this for every ingredient that is trimmed, peeled, boned or cooked down.
Worked example: food cost for a month
The period method tells you what actually happened. Take a restaurant with these figures for the month, all excluding VAT:
| Line | Amount |
|---|---|
| Opening stock | £8,400 |
| Plus purchases | £21,600 |
| Less closing stock | £9,000 |
| Food used (actual cost of goods sold) | £21,000 |
| Net food sales | £68,000 |
| Actual food cost % | 30.9% |
Now compare it with the theoretical figure. If your POS says you sold dishes whose recipe costs add up to £19,040, your theoretical food cost is 28.0%. The £1,960 gap (2.9 points of sales) is variance: waste, over-portioning, unrecorded staff meals and comps, supplier short deliveries, miscounted stock or theft. Some gap is normal. One that keeps growing deserves an investigation. Our stock take template shows how to count so that the closing stock figure can be trusted.
What is a good food cost percentage?
The figure most often quoted for UK restaurants is 28 to 35% of food sales. Lightspeed's UK guide gives that range alongside 30 to 35% for labour and 55 to 65% for prime cost (food plus labour), with 70% as a warning level. Treat it as a rule of thumb: the source does not publish the data behind it, and your own target depends on your format.
- A steakhouse or seafood restaurant with expensive proteins will sit higher than a pasta or pizza place.
- A venue with high drinks sales can run food cost higher and still hit its overall gross profit.
- Your best target is the one that, after your real labour and overheads, leaves the profit you need. See restaurant profit margins in the UK and labour cost percentage.
Keep food and drink separate. Blending them in one percentage hides problems in both.
Five ways to lower food cost without shrinking portions
- Weigh and portion. Scales and portion tools on proteins, cheese and fries are the cheapest fix. A 10g over-pour on a £22 per kg ingredient is £0.22 a plate, and across 3,000 plates a month it is £660.
- Re-cost when suppliers move. Recost your top 20 ingredients every time an invoice price changes, not once a year. Prices drift upwards without anyone noticing.
- Price check suppliers. Ask two alternative suppliers to quote your top 20 lines every quarter.
- Use the menu mix. Move high-margin, popular dishes to prominent spots and review dishes that are both unpopular and low margin.
- Raise the price on the dishes that need it. To get the Chicken Milanese to 30% when its ingredient cost has risen to £4.60, the net price must be £4.60 ÷ 0.30 = £15.33, so about £18.40 with VAT. Small increases on a few dishes beat across-the-board rises.
Keeping recipe costs current
A recipe card costed in January is wrong by June. Set clear triggers: a supplier price change above a few percent on a key ingredient, a menu change, or a change in pack size. Spreadsheets work if one person owns them. Where you have more than 30 or 40 recipes, software saves hours. TablePort's stock management (£149 per location per month ex VAT) links recipes to supplier prices and sales, so food cost per dish and variance update as invoices and sales come in. A spreadsheet and the free calculator are enough to get started.
This guide is general information, not tax or financial advice; speak to an accountant about your own VAT position.
Frequently asked questions
- What is the formula for food cost percentage?
Food cost % = cost of food used ÷ net food sales × 100. For a period, food used is opening stock plus purchases minus closing stock. For a single dish, it is the portion's ingredient cost divided by the net price, meaning the menu price with VAT removed.
- Should I calculate food cost before or after VAT?
Use sales excluding VAT and costs excluding VAT. VAT collected belongs to HMRC, so it is not revenue. Dividing by the VAT-inclusive price understates food cost by about a sixth, for example 24.8% instead of 29.8% on a £16.50 dish.
- What is the difference between theoretical and actual food cost?
Theoretical food cost is what your recipes say you should have spent on the dishes you sold. Actual food cost is what you really used, based on stock counts and invoices. The difference is your variance, and it points to waste, over-portioning, errors or theft.
- How often should I calculate food cost?
Weekly is a sensible rhythm if you do a stock count, with a deeper monthly review. Recipe costs should be refreshed whenever a significant supplier price changes. Calculating only once a month means a problem can run for four weeks before you see it.
- Is 30% a good food cost percentage?
For many UK restaurants it sits comfortably inside the 28 to 35% range commonly quoted as a rule of thumb. Whether it is good for you depends on your labour, rent and other costs. If your overheads are heavy, 30% may be too high to leave a profit.
- Does food cost include drinks and staff meals?
Calculate food and drink separately. Staff meals and wastage should be recorded, because they are real costs, and either included in the food-used figure or tracked as their own lines so they do not look like unexplained variance.