How do you calculate food cost percentage in a restaurant?

Direct answer

Food cost percentage is calculated by dividing the cost of ingredients by the selling price, then multiplying by 100. For example, if a dish costs $6.00 to make and sells for $20.00, the food cost percentage is 30%.

The formula

Food cost percentage = ingredient cost ÷ selling price × 100

Example: $6 ingredient cost ÷ $20 selling price × 100 = 30% food cost.

Why this number matters

Food cost percentage helps owners, chefs, and managers understand whether menu pricing is commercially sustainable. If the number is too high, the business may sell plenty of food but keep too little profit after ingredients are paid for.

What should be included?

• Main protein or core ingredient
• Vegetables, garnish, sauces, and sides
• Cooking oils, dressings, and condiments
• Packaging for takeaway items
• Any ingredient used to plate or finish the dish

Food cost is not the full story

A low food cost percentage does not automatically mean a dish is good. A dish also needs to sell, fit the brand, be operationally practical, and deliver enough dollar margin.

Common issues

• Recipes are not standardised
• Portions change by staff member
• Supplier pricing changes are not updated
• Waste and spoilage are not tracked
• Menu prices stay the same while costs increase

How Hospo Dojo can help

Hospo Dojo helps hospitality businesses understand food cost, menu pricing, recipe control, and profitability in a way that supports real decisions.

Next step: choose the top 10 selling items and calculate their real food cost percentage first.