Selling Price Calculator

Markup is profit as a percentage of cost (what you paid). Margin is profit as a percentage of selling price (what the customer pays). A $10 item sold for $15 has a 50% markup but only a 33.3% margin.

The formulas:
Markup % = (Selling Price − Cost) ÷ Cost × 100
Margin % = (Selling Price − Cost) ÷ Selling Price × 100

The markup percentage is always higher than the margin percentage for the same product. Confusing the two is one of the most common pricing mistakes in food service — and it directly erodes profit.

Most restaurants use a 200-300% markup on food (3x to 3.6x the ingredient cost), which translates to a 28-32% food cost percentage (margin). Beverages carry even higher markups — 300-575% depending on category.

By restaurant type:
Fast casual: 250-350% markup (22-28% food cost)
Full-service casual: 200-300% markup (28-32% food cost)
Fine dining: 185-230% markup (30-35% food cost)

Use our menu pricing calculator to find the right price for each dish based on your target food cost. For more on restaurant margins, see our guide on restaurant profit margins.

Two formulas to memorize:

Margin = Markup ÷ (1 + Markup)
Markup = Margin ÷ (1 − Margin)

Quick reference table:
100% markup = 50% margin
150% markup = 60% margin
200% markup = 66.7% margin
233% markup = 70% margin (30% food cost)
300% markup = 75% margin (25% food cost)

Example: a 30% food cost (margin) converts to 42.9% markup. 0.30 ÷ (1 − 0.30) = 0.429. Most restaurant operators think in margin (food cost %), not markup.

You're likely confusing markup with margin. If you set a 50% markup thinking you'd keep 50% of revenue as profit, you're actually only keeping 33.3%. To keep 50% of revenue, you need a 100% markup (2x your cost).

Another common cause: your cost calculation is incomplete. If you're only counting raw ingredients but ignoring waste (typically 5-10% of food purchases), packaging, or prep labor, your real cost is higher than you think — and your true margin is lower. Use our food cost calculator to get an accurate cost baseline.

Use whichever metric your industry uses. Restaurants think in margin (food cost percentage) — "we run 30% food cost" means 30% of revenue goes to ingredients. Retail and wholesale use markup — "we mark up 100%" means the selling price is double the cost.

The important thing is consistency across your team. If your chef says "30%" and your accountant hears "30% markup" instead of "30% margin," every price will be wrong. This calculator shows both numbers side by side so you can cross-check.

This calculator covers direct costs (ingredients, materials, packaging). Labor, rent, and utilities are overhead costs that aren't included in food cost percentage.

To be profitable, track your prime cost (food + labor), which should stay under 60-65% of revenue. Typical breakdown for a full-service restaurant:

• Food cost: 28-32%
• Labor cost: 25-35%
• Overhead: 20-25%
• Net profit: 3-9%

Use our restaurant profit margin calculator for a full P&L picture, or the labor cost calculator to check your labor numbers.

Third-party delivery platforms charge 15-30% commission on every order. If you use the same menu price for delivery, your effective margin drops dramatically. A dish with 30% food cost sold on a platform charging 25% commission leaves you with only 45% of revenue — barely enough to cover labor and overhead.

Most restaurants handle this by: raising delivery menu prices by 15-20%, adding a delivery surcharge, or reducing portion sizes for delivery-only items. Some create a separate, simplified delivery menu with items that travel well and maintain higher margins.