How to Calculate Food Cost for Your Restaurant

Two formulas run your restaurant’s food cost. The per-dish formula tells you whether a menu item is priced right. The COGS formula tells you whether your kitchen is actually making money. Most guides cover one or the other. You need both.

Per-dish food cost

Food Cost % = (Ingredient Cost / Menu Price) x 100

Take a chicken parmesan:

• Chicken breast — 8 oz at $3.40/lb = $1.70
• Mozzarella — 3 oz at $4.80/lb = $0.90
• Marinara (house) — 4 oz = $0.30
• Breadcrumbs — 2 oz at $1.20/lb = $0.15
• Parmesan — 1 oz at $8.00/lb = $0.50
• Spaghetti — 6 oz dry at $1.40/lb = $0.53
• Oil, seasoning, garnish — $0.25

Total: $4.33 per plate

Sell it for $17.00:

Healthy margin. Now try $14.00:

Still within range, but tight. Less room for waste, overportioning, or a price jump on chicken.

You can run this for your own recipes with our free food cost calculator. No signup, no spreadsheet formulas.

Overall food cost (COGS)

Per-dish food cost assumes perfect portioning, zero waste, and no spoilage. Your actual kitchen doesn’t work that way. That’s where COGS comes in.

Food Cost % = (Beginning Inventory + Purchases - Ending Inventory) / Total Food Sales x 100

Say it’s January:

• Beginning inventory (Jan 1): $12,000
• Purchases during January: $28,000
• Ending inventory (Jan 31): $11,500
• Total food sales in January: $95,000

That 30% is your actual food cost. It captures everything the per-dish formula misses: waste, spoilage, overportioning, comps, staff meals, and yes, theft.

The gap between ideal and actual

Your ideal food cost is what the numbers should be if every dish was portioned perfectly, weighted by what you sold. Your actual food cost (COGS) is what really happened. The difference is money your kitchen is leaking.

	Ideal	Actual	Gap
This example	26.2%	30.0%	3.8%

On $95,000 in monthly sales, 3.8% is $3,610. That’s $43,000 a year disappearing into waste, overportioning, or untracked losses.

Under 2% gap? Tight kitchen. Over 5%? Something needs investigating.

Benchmarks for 2026

• Under 28% 26.0% — Strong. Common for pasta and pizza concepts with lower-cost ingredients.
• 28-32% 30.0% — Healthy range for most full-service restaurants.
• 32-35% 33.0% — Acceptable for premium proteins. Steak and seafood places live here. Keep it controlled.
• Over 35% 37.0% — You’re probably losing money once labor and overhead are factored in.

Wholesale food prices sit 31% above pre-pandemic levels as of early 2026, and dining-out inflation is projected at 3.7% this year. Beef and veal alone are up 5.5%. If you haven’t recalculated your food costs recently, your numbers are probably stale.

Setting menu prices from food cost

Work the formula backward:

Menu Price = Ingredient Cost / Target Food Cost %

Chicken parm at $4.33 with a 28% target:

Round to $15.50 or $16.00. If the market won’t support that price, you either lower ingredient cost or accept a higher food cost on that dish and offset it with lower-cost items elsewhere on the menu.

Not every dish needs to hit 28%. A pasta at 20.0% can subsidize a ribeye at 35.0%. What matters is the blended average across your full menu.

Mistakes that inflate your food cost

Costing with purchase price, not usable yield. You buy whole salmon at $12/lb. After deboning and skinning, usable yield is about 60%. Your real cost is $20/lb. If your recipe cards say $12, every food cost calculation built on them is wrong.

Using stale prices. Chicken breast went from $2.80/lb to $3.40/lb over six months in 2025. If your recipe cards still say $2.80, you’re underestimating food cost on every dish that uses chicken.

Skipping the small stuff. A tablespoon of olive oil is $0.15. A lemon wedge is $0.10. Microgreens for garnish, $0.30. One plate? Nothing. Across 200 covers a night, that’s $110/day in untracked cost — over $40,000 a year.

No portion standards. Your recipe calls for 6 oz of salmon. The line cook eyeballs 8 oz. That’s a 33% cost increase on the most expensive component of the dish, happening every time it goes out.

Calculating once and forgetting. Supplier prices change weekly. A food cost number from three months ago is decoration, not data.

How often to run the numbers

Weekly COGS catches problems fast. A bad produce delivery, a line cook who’s heavy on proteins, an invoice error: you’ll see it in days instead of discovering a 4% overage at month-end.

Monthly is the minimum. Weekly is better.

Per-dish food cost should be recalculated whenever supplier prices change. Doing it by hand across 30-50 recipes is where most people give up and go back to guessing. That’s what recipe costing software automates.

Start with the math

Grab your top 10 selling dishes. Calculate the per-dish food cost for each one. Then run your monthly COGS. Compare the two numbers. The gap will tell you exactly where to focus.

You can start right now with our free food cost calculator. Enter your ingredients, quantities, and prices, and see your food cost percentage.