Food cost percentage formula (with checked examples)

Plate food cost % = ingredient cost per portion / selling price per portion x 100. Actual restaurant food cost % = food used during a period / food sales in the same period x 100.

A plate with $5.20 of ingredients and an $18 selling price has a 28.9% food cost. That leaves $12.80 before labor, overhead and other costs. It does not prove that the dish makes a net profit.

Use plate cost for a dish, actual cost for inventory use, and theoretical cost for the ingredients expected from your sales mix. All prices below are illustrative USD assumptions, not supplier quotes or industry targets. Food sales exclude sales tax and alcohol; use the same categories and dates in both parts of each ratio.

Formula 1: Per-dish food cost percentage

Include each ingredient in the portion, including garnish, condiments and planned yield loss. The examples use US ounces for weight and US fluid ounces for liquids. Sum unrounded line costs, then round the recipe cost for display.

Spaghetti carbonara

• Spaghetti - 6 oz dry at $1.40/lb = $0.53
• Guanciale - 3 oz at $9.60/lb = $1.80
• Eggs - 2 large at $0.35 each = $0.70
• Pecorino - 1.5 oz at $7.20/lb = $0.68
• Black pepper, salt, pasta water - $0.05

Ingredient cost: $3.75. The pasta is $0.525 and the cheese is $0.675 before rounding; do not add their rounded display amounts.

Sell it for $16:

The ingredient share is 23.4%. The remaining $12.25 per sale must cover labor, overhead and the other costs of service.

Smash burger with fries

• Ground beef - 6 oz (two 3 oz patties) at $4.80/lb = $1.80
• Brioche bun - $0.45
• American cheese - 2 slices = $0.24
• Pickles, onion, sauce - $0.30
• Fries - 5 oz at $0.90/lb = $0.28
• Fry oil portion - $0.15
• Lettuce, tomato - $0.18

Ingredient cost: $3.40

At $15:

At $13:

The same $3.40 ingredient cost is 22.7% at $15 and 26.2% at $13. A price change changes the ratio even when the recipe stays the same. Replace these sample prices with your invoice costs.

Margarita

• Tequila: 2 US fl oz at $18 per 750 mL = $1.419528

• Fresh lime juice: 1 US fl oz = $0.25

• Orange liqueur: 0.75 US fl oz at $12 per 750 mL = $0.354882

• Simple syrup: 0.5 US fl oz = $0.05

• Lime wheel and salt rim = $0.10

Ingredient cost: $2.174410 before rounding, or $2.17. One US fl oz is 29.5735 mL, so the tequila costs about $0.71 per fl oz.

At $14:

This drink has a 15.5% ingredient share at the assumed price. Keep alcohol costs and alcohol sales in a separate beverage calculation when measuring food-only actual cost.

Formula 2: Actual food cost percentage (COGS)

For a simple food-only period, food used equals opening inventory plus net purchases minus closing inventory. BCcampus explains the inventory procedure. Count and value stock consistently. Record purchase credits, transfers and staff-meal adjustments under a consistent accounting policy.

Assume the following February inventory values and net food sales, with no transfers or separately recorded consumption adjustments:

• Beginning inventory (Feb 1): $14,200
• Purchases during February: $31,500
• Ending inventory (Feb 28): $13,800
• Total food sales: $102,000

Food used is $31,900 and the ratio is 31.3%. The raw inventory calculation includes any food removed from stock. Waste, staff meals and complimentary dishes need separate records if you want to explain that use; it is not a receipt total or a measure of net profit.

What goes into food cost (and what doesn't)

For food-only costing, include ingredients, garnishes and condiments. Keep alcohol purchases and alcohol sales separate.

• Raw ingredients used in menu items
• Ingredients for daily specials and LTOs
• Condiments, garnishes, bread service, anything the customer consumes

Labor, rent, utilities and packaging need separate cost records. They still matter when you set a price, even though they are outside the ingredient-cost ratio.

• Food cost plus labor cost is often called prime cost. It is a separate measure with its own cost and sales definitions.

• Food used for staff meals, complimentary dishes and promotions remains in the raw inventory-use total unless you record a consistent adjustment.

• Do not remove a cost from one side of a comparison without making the matching adjustment to the other side.

Formula 3: Ideal food cost percentage

Theoretical, or ideal, food cost weights each standard recipe cost by the number sold. It uses your standard portions and planned yields. Divide by the same net food sales used for actual cost. A simple average of dish percentages does not account for sales mix.

Assume these 400 dishes were sold in one week at the listed prices, with no discounts. This sales-mix example uses recipe costs rounded to cents; the salmon cost is an assumed $7.80 per portion.

The theoretical ratio is 24.9%. Changing the quantities sold changes the ratio. Price differences also matter: weight costs and sales in dollars, rather than averaging the three plate percentages.

The gap between ideal and actual

Compare actual and theoretical costs for the same week and the same food-sales categories. For this week, assume opening inventory of $1,000, net purchases of $2,100 and closing inventory of $1,000. Actual food used is $2,100.

The $369 difference is 5.3 percentage points of this week's food sales. Check inventory counts, invoice timing, recipe prices and recorded non-sale use before you call it waste. This one-week illustration is not an annual savings forecast.

Check portions and prep yields against your standard recipes. Include planned trim or cooking losses in those standards.

Record spoilage, staff meals and complimentary dishes. A missing record can make expected use look too low.

Investigate unexplained differences with actual stock and sales records. There is no universal gap threshold that proves a kitchen is well run or badly run.

Food cost benchmarks: read the cost and sales definitions

The National Restaurant Association's September 2025 analysis reports 2024 food and non-alcoholic beverage cost medians of 32.0% of sales for full-service respondents and 32.4% for limited-service respondents. The survey covered more than 900 operators.

These are survey medians, not recommended goals. They combine food and non-alcoholic beverage costs and use sales as reported in that survey. They are not a target for every dish or a direct food-only comparison unless your cost and sales definitions match.

What to check when your ratio changes

Start with the inputs before changing portions or menu prices.

Check recipe costs against current invoices. If costs rise while the recorded prices stay fixed, the theoretical cost can be understated.

Look at the sales-weighted theoretical calculation. A change in the dishes sold can move the total ratio even when each recipe is unchanged.

Review high-volume dishes and dishes with a large total ingredient spend. Measure portions, then compare their costs with the menu prices actually charged.

Reconcile inventory and recorded non-sale use, then investigate portion and yield differences. The food cost control guide gives practical steps for recording waste and checking recipes.

What is a good food cost percentage?

A useful target covers the rest of your costs at your expected sales volume. Food cost percentage alone cannot tell you what target will work for your restaurant.

Compare like-for-like periods and cost categories. Use survey figures as context, then build a budget from your own operation.

For an individual plate, use the food cost percentage calculator. To add ingredient quantities and purchase prices, use the recipe cost calculator.

Keep plate, inventory and sales-mix calculations separate. A beverage-heavy restaurant and a food-only business do not have the same cost base.

How to reduce food cost percentage

Review purchasing costs, recipe yields and portions, menu prices, and the mix of dishes sold. Changes must also fit your service and customer demand.

Update ingredient prices from invoices. Recalculate affected recipes before deciding whether to change a price.

Measure the portions in frequently sold dishes. Correct a portion that differs from the recipe standard, and cost any planned change before you use it.

Record waste by item and reason. If a measured change reduces avoidable food use, calculate its value from purchase cost; do not treat a percentage difference as guaranteed savings.

Compare contribution dollars and sales volume as well as ingredient percentages. Menu engineering helps you compare the dishes sold.

Compare equivalent supplier quotes, pack sizes and usable yields. A cheaper case is not necessarily cheaper per usable portion.

Working the formula backwards: menu pricing

You can reverse the food cost percentage formula to set prices:

That grilled salmon at $7.80 ingredient cost, targeting 30%:

Targeting 28%:

The $27.86 result is a cost-based price calculation, not proof of customer demand. Compare it with your labor, overhead and local market before setting the final price.

A 36% steak and a 22% pasta do not have a fixed combined ratio. The result depends on both quantities sold and selling prices. Calculate total ingredient cost divided by total matching food sales.

Try a price change in the DishCost sample menu to see the affected recipe costs. You can explore without an account.

Using the formula in a spreadsheet

For each menu item, you need three columns:

For the COGS formula, a separate sheet:

Give each ingredient one current purchase price and link recipes to it. A shared ingredient price should update every dependent recipe, rather than several copied cells.

See the recipe costing software page for ingredient-price tracking and saved recipes. Inventory-based actual food cost still needs stock counts, purchase records and matching sales data.

Quick reference: all three formulas

Use plate cost to check a dish, actual cost to measure food used, and theoretical cost to explain expected use. Match dates and cost categories before comparing them.

Use the percentage calculator for the plate ratio, or the recipe costing template to keep ingredient quantities and prices in a worksheet.