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How do I calculate food cost percentage?

Prepared by the Flawian team · Reviewed .

Food cost percentage is food used divided by food sales, times 100. For one dish, divide its plate cost, the cost of its recipe's ingredients, by its menu price, times 100. For a month, food used is opening stock plus purchases minus closing stock. Food used above the recipe cost of the dishes sold is cost beyond your recipes.

Principle and explanation

Food used and food sales must cover the same items: drinks go on both sides or neither, and service charges and resale goods stay out. Plate cost uses today's supplier prices and the recipe's portions, garnish and sides included. Food used counts everything that left your stock. Recipe cost counts only what the dishes sold should have used. Causes of the difference include waste, spoilage, portions bigger or smaller than the recipe, free or staff meals, theft, wrong counts of stock or dishes sold, and supplier price changes.

What restaurants report

In a survey of more than 900 US restaurant operators, the National Restaurant Association reported 2024 median food and non-alcohol drink costs as a share of sales. In the two cited articles, medians for four groups run from 31.0%, for fullservice restaurants with annual sales of 2 million dollars or more, to 33.7% for smaller ones. Neither article says which sales it means, so the figures cannot be compared one-to-one with your food-sales percentage; both say they are not standards or goals for individual restaurants.

Worked example

Illustrative scenario. These are fictional inputs, not customer results.

A diner starts the month with $6,000 of food in stock, buys $13,500 and ends with $5,500 on the shelves. It used $14,000 of food on $40,000 of food sales, which is 35%. Its burger has a plate cost of $4.20 at a menu price of $14, which is 30%. Every dish sold, at its plate cost, adds up to $12,400, which is 31% of food sales.

How the diner's dishes add up to the month's recipe cost and food sales
DishNumber soldPlate costMenu priceRecipe costFood sales
Burger1,000$4.20$14$4,200$14,000
Salad bowl800$4.00$12$3,200$9,600
Pasta900$4.30$13$3,870$11,700
All other dishes$1,130$4,700
Total$12,400$40,000

So $1,600 of food used went beyond the recipes in the month, four points of food sales. With higher menu prices or fewer discounts and the same number of each dish sold, both percentages would fall and the $1,600 would stay.

Try it with your own numbers

$

What the food on hand cost you, counted on the first day. Without counts, enter 0 in both stock boxes, and the dish share stays exact; for one dish only, enter 0 in all five month boxes.

$

Food delivered in the month at what you paid, after supplier credits. Enter 0 if none came in.

$

What the food on hand cost you, counted on the last day. Without counts, enter 0 in both stock boxes, and the dish share stays exact.

$

What customers paid for the same items you count as food, after discounts, without tips or sales tax you only collect and pass on to the state.

$

Each dish's plate cost times the number sold, added up. Enter 0 if you have not costed every dish.

$

What that dish's ingredients cost at today's supplier prices, garnish and sides included. Enter 0 to skip the dish.

$

What you charge for it, without sales tax you only collect and pass on to the state. Enter 0 to skip the dish.

Your result

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Method

Food used = opening stock + purchases − closing stock, at what you paid after supplier credits: $6,000 + $13,500 − $5,500 = $14,000.

Food sales = what customers paid for those items after discounts, without tips or sales tax you only collect and pass on to the state.

Food cost percentage = food used ÷ food sales × 100: $14,000 ÷ $40,000 × 100 = 35%.

Recipe cost = each dish's plate cost × number sold, added up: $4,200 + $3,200 + $3,870 + $1,130 = $12,400, and $12,400 ÷ $40,000 × 100 = 31%.

Gap = food used − recipe cost: $14,000 − $12,400 = $1,600.

Dish share = plate cost ÷ menu price × 100: $4.20 ÷ $14 × 100 = 30%.

Special cases:

  • Closing stock above opening stock plus purchases means a count is off or an invoice is missing; food used cannot be worked out then.
  • With no stock counts, purchases ÷ food sales equals the food cost percentage only if stock at the end equals stock at the start.
  • With no food sales there is no percentage, but the food used still cost money.
  • Without plate costs for every dish there is no recipe cost or gap; the month's percentage and each costed dish's share still hold.
  • Recipe cost above food used has causes such as smaller portions, a supplier price rise since purchase, or a wrong count, invoice or plate cost.
  • A plate cost above the menu price gives a dish share over 100%: each one sold loses money on food alone.
  • A dish with no menu price, such as a free side, has no dish share.

Common misconceptions

Purchases divided by sales is my food cost percentage.
Purchases include food bought for later. A month with a big delivery reads high and the next reads low; the change in stock corrects both.
A lower percentage always leaves more money.
Not always. Raising a dish's price lowers its share, but if fewer people order it, the money it leaves after food can fall.

What this does not show

  • It covers food only. Wages, rent and every other cost sit outside it, so the percentage alone does not show whether the month made money.
  • A delivery invoiced in one month but counted on the shelf in the next can swing both months, so compare several months counted the same way.
  • Finding the cause of a gap takes evidence by item, such as a waste log, portion checks or counts of your best sellers.

First step

Count your food stock at cost on the last day of this month and keep it as next month's opening stock. Then cost your three best-selling dishes from their recipes at today's supplier prices.

Sources