Food cost per dish: how to calculate it, what percentage to aim for and how to set the menu price

The food cost of a dish is the question that decides whether that dish feeds you or just keeps you busy: how much of what you charge goes on produce. Almost everyone knows the formula; what goes wrong is how it is applied. People divide by the price including VAT, use the gross purchase price, or forget the bread and the side, and the result comes out several points better than it really is.

This guide works dish by dish: how to calculate the food cost of a single portion properly, what percentage makes sense as a target, and how to run that percentage backwards to set the menu price. For the big picture (food cost across the whole venue, menu engineering and the levers that bring it down), see the practical food cost guide.

How to calculate the food cost of a dish without the three traps

The formula is short:

Food cost (%) = Portion cost / Selling price EXCLUDING VAT × 100

The three traps sit on both sides of the division:

1. VAT. The menu price has VAT inside it, and that money is not yours. In Spain, food served at the table carries 10%, so the price excluding VAT is the menu price divided by 1.10. Divide by the price including VAT and food cost comes out lower than it is.
2. Waste. Cost has to come from the net weight that reaches the plate, not the weight you bought. A whole fish, a cut of meat with fat on it or a vegetable you peel all lose part of what you paid for before they reach the pan.
3. What is not in the recipe. Bread, the side, the sauce, the finishing oil, the lemon. Loose cents that, added up, can move the percentage by a couple of points.

Illustrative example, step by step

A made-up example to show the method (not a client, and the prices are indicative): grilled sea bass with vegetables, at €18.00 on the menu.

Step 1 — Net cost of the main ingredient. The sea bass is bought whole at €9.00/kg and, once filleted, around 45% of it is usable. So the kilo that reaches the plate costs:

€9.00 / 0.45 = €20.00/kg net

Step 2 — Portion cost, ingredient by ingredient.

Ingredient	Quantity per portion	Cost
Sea bass fillets (net)	180 g at €20.00/kg	€3.60
Seasonal vegetables (gross)	250 g at €2.40/kg	€0.60
Olive oil, salt, lemon	—	€0.20
Bread	1 portion	€0.15
Total		€4.55

Step 3 — Price excluding VAT.

€18.00 / 1.10 = €16.36

Step 4 — Food cost.

€4.55 / €16.36 × 100 = 27.8%

Now the traps, on the same dish. Had you used the gross purchase price (180 g at €9.00/kg = €1.62), the total cost would drop to €2.57 and food cost would come out at 15.7%. Had you divided by the €18.00 including VAT, it would come out at 25.3%. Three figures for the same dish; only 27.8% is real.

You can run the sum with your own numbers in the food cost calculator, which asks for the cost, the menu price and the VAT rate, and strips the VAT out for you.

What food cost percentage to aim for (and why it is not the only thing that matters)

There is no universal figure. As an indicative reference, table-service hospitality usually works with a food cost of around 28–35% per dish, lower on drinks, coffee and house-made desserts, and higher on dishes built on expensive produce. Ranges by type of venue are in the practical food cost guide. Treat them as a starting point, not a rule: the healthy percentage depends on your rent, your staff and your average ticket.

Two nuances that prevent bad decisions:

• Percentages do not pay bills; euros do. A dish at 35% that leaves €12 of gross margin can earn you more than one at 20% that leaves €3. Always look at both columns: percentage and margin in euros.
• What counts is the whole menu, weighted by sales. A dish at 38% that rarely sells barely moves the total; one at 33% that goes out to half the tables decides it. That is why you need to know what sells, not just what it costs.

From target food cost to menu price: the formula in reverse

If you know what the portion costs and what percentage you want, the price follows:

Price excl. VAT = Portion cost / Target food cost
Menu price = Price excl. VAT × 1.10

With the sea bass from the example and a 30% target:

€4.55 / 0.30 = €15.17 excl. VAT  →  €15.17 × 1.10 = €16.68 on the menu

Rounded to a sensible menu price (€16.90 or €17.00), you would be on target. At €18.00 the dish has a cushion: 27.8%.

That cushion is exactly what a supplier increase eats. If sea bass goes from €9.00 to €11.00/kg, the net kilo rises to €24.44, the fillet portion to €4.40 and the dish total to €5.35. With the menu still at €18.00, food cost jumps to 32.7% without anyone changing a thing in the kitchen. Getting back to 30% would take €17.83 excluding VAT, about €19.60 on the menu.

This is the part that gets neglected most: the calculation is not done once. It changes every time a purchase price changes. How to keep your costing cards current without redoing them by hand is covered in recipe costing cards: what they are, how to build one and how to keep them current.

By hand, or let the POS do it

A spreadsheet is enough to start with: the recipe costing template in Excel is free, needs no sign-up and already has the waste, food cost and margin formulas in place.

Once the menu grows beyond a handful of dishes, the hard part is not calculating: it is keeping it up to date. In Bouzon Digital Stock & Recipes, every dish has its recipe with quantities and waste, each ingredient costs its weighted average purchase cost (updated when you record the delivery note, not by the last loose price) and margin is calculated on the price excluding VAT. On top of that, every sale on the POS draws the recipe’s ingredients out of stock, so food cost stops being a theoretical figure and can be checked against what actually leaves the store room.

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Want to see your menu’s food cost in real time? POS + Stock & Recipes is €49.98/month, no lock-in and no commission on sales. See the details on Stock & Recipes or compare modules on the plans page.