Food Cost Percentage: How to Calculate It (With a Free Calculator)

A busy dining room is not always a profitable one. Food cost percentage tells you whether your menu prices actually cover what goes on the plate. This guide covers both formulas, a worked example in Canadian dollars, how to choose your own target and how to price a dish to hit it, including on delivery apps.

If you would rather skip the maths, the free food cost calculator does it for you: add your ingredients and it shows plate cost, food cost percentage and the price that hits your target.

What is food cost percentage?

Food cost percentage is the cost of ingredients as a share of the money those ingredients bring in. There are two ways to measure it, and you need both.

Per dish

For a single menu item, the formula is:

Food cost % = plate cost ÷ menu price × 100

Plate cost is the ingredient cost of one portion: each ingredient's cost multiplied by the quantity used in one serving, all added up.

Per period

For a week or a month, you look at what you actually used, not what a recipe says you should have used:

Food cost % = (opening inventory + purchases − closing inventory) ÷ food sales × 100

The per-dish number tells you what each plate should cost. The per-period number tells you what your kitchen actually spent. The gap between the two is where waste, over-portioning, comps and theft show up.

A worked example in CAD

Here is a cheeseburger with fries. The prices below are an example only, made up to look realistic for a Canadian kitchen. Use your own supplier invoices.

If the burger sells for $19.00:

• Food cost % = $5.30 ÷ $19.00 = 27.89%
• Gross profit per plate = $19.00 − $5.30 = $13.70

A period example

Say your example kitchen counted $8,400 of food on the shelves on the 1st, bought $12,600 during the month and counted $7,900 at month end. Food sales for the month were $41,000.

• Cost of food used = $8,400 + $12,600 − $7,900 = $13,100
• Food cost % = $13,100 ÷ $41,000 = 31.95%

Again, these numbers are an example, not a benchmark.

Yield and trim: why purchased weight lies

Notice the fries line above uses the cost of usable potato, not the price on the invoice. That is yield: the usable amount of an ingredient after peeling, trimming and cooking.

In the example, potatoes cost $1.80 per kg. After peeling and cutting, 1 kg gives about 700 g of usable fries, a 70% yield. So the real cost is:

Usable cost = purchase price ÷ yield = $1.80 ÷ 0.70 = $2.57 per kg

Costing on purchased weight makes every dish look cheaper than it is. For your main proteins and produce, weigh what comes in, prep it as usual and weigh what is left.

How to set your food cost target

You will see a lot of "ideal" food cost figures online. Ignore them. Targets vary by concept: a steakhouse, a pizza shop, a café and a tasting menu all have very different ingredient costs, prices and amounts of in-house prep.

A better approach is to use your own numbers:

1. Start with your history. Calculate your period food cost percentage for the last few months from your counts and invoices.
2. Cost every dish. Work out plate cost and food cost percentage for each item on the menu.
3. Compare dishes with each other. Which items sit well above your overall number? Those are where to look first.
4. Set a realistic target. Pick a number a little better than your recent history that still fits your concept, and look at it alongside labour as part of your prime cost.
5. Review it. Compare each period with your own past periods, not with someone else's restaurant.

Remember that a low food cost percentage is not the goal on its own. A dish with a higher percentage can still put more dollars in the bank per plate than a cheap one that rarely sells.

How to price a dish to hit your target

Once you have a target, the pricing formula flips the food cost formula around:

Menu price = plate cost ÷ target food cost %

Say you choose a 26% target for the burger based on your own history (an example figure):

• Price = $5.30 ÷ 0.26 = $20.38
• Round up to a consistent ending, such as $20.50, so you do not lose margin.

The menu pricing calculator uses exactly this formula for the in-store price, then shows what card processing takes from it.

Delivery apps change the maths

When a delivery app takes a commission, the same $20.50 burger pays you less. To keep the same amount, calculate the delivery price instead of guessing a markup.

The markup that offsets a commission is:

Delivery markup = commission ÷ (1 − commission)

For example, if your contract has a 20% commission (use your own rate):

• Markup = 0.20 ÷ 0.80 = 25%
• Delivery price = $20.50 ÷ (1 − 0.20) = $25.63

Notice the markup is higher than the commission itself, because the commission is taken from the higher delivery price.

The menu pricing calculator does this in one step: it takes your in-store price minus your average card processing cost, then divides by (1 − commission), so the app payout matches what you keep in store. To see the full picture per order, including other app fees, food cost and packaging, use the delivery commission calculator.

Common food cost mistakes

• Forgetting the small things. Garnish, sauces, dressings, fryer oil, bread service and takeout packaging all belong in plate cost.
• Stale supplier prices. A plate cost from last spring is not your plate cost today. Update it whenever a supplier price changes noticeably, and at least each time you review the menu.
• Not counting waste. Spoilage, trim, dropped plates and overproduction are real costs. If you do not track them, your period number will drift away from your dish numbers with no explanation.
• Ignoring comps and staff meals. Comped dishes and staff meals use food but bring in no sales. Record them so you know where the gap comes from.
• Inconsistent portions. A recipe card means little if each cook plates a different amount.

A simple weekly food cost routine

You do not need a finance team. Block out an hour each week:

1. Count. Do a closing count of your main items on the same day each week.
2. Add up purchases. Total the invoices received since the last count.
3. Pull food sales. Take food sales for the same dates from your POS.
4. Calculate. Opening + purchases − closing, divided by food sales.
5. Compare. Check the result against last week and your target.
6. Investigate the gap. Look at your best sellers' plate costs and any price changes on recent invoices.
7. Act. Adjust a portion, a recipe, a supplier or a price.

How Platter helps today

Platter keeps your stock and sales data in the same system you take orders on.

With inventory management in Platter, you track products by category and unit of measure, set reorder points and see low-stock alerts when an item drops below its point. On the Pro plan ($149 CAD per location per month), staff can record day-end counts in the app and log deliveries as they arrive, which gives you the opening and closing numbers for the period formula.

In menu management, you can record the cost of production on each menu item, so you can compare what a dish costs with what it sells for. You can also keep separate dine-in, takeout and delivery prices on the same item.

On the Pro plan, Platter's 30+ reports include sales by item for any date range, so you can see which dishes actually sell and weigh their food cost against their volume.

To be clear about what is not live yet: automatic recipe-based depletion, where each dish sent to the kitchen deducts its ingredients from stock, is part of Advanced Inventory, which is coming soon. Today, plate costs are entered per item and counts are done by your team.

FAQ

What is a good food cost percentage?

It depends on your concept, prices and how much prep you do in-house. Rather than chase a single industry figure, track your own numbers over time and compare dishes with each other.

What is the difference between plate cost and food cost percentage?

Plate cost is a dollar amount: the ingredient cost of one portion. Food cost percentage is that cost divided by the menu price, so it shows the share of the price that goes to ingredients.

Should packaging be included in food cost?

For takeout and delivery items, include packaging in your per-order costs so your prices cover it. Whatever you decide, do it the same way every period so your numbers stay comparable.

How often should I calculate food cost?

Calculate the period number weekly if you can, and at least monthly. Update plate costs whenever a supplier price changes noticeably and each time you review the menu.

Does Platter calculate food cost automatically?

Not fully yet. Today you record cost of production on each menu item, track stock with reorder points and do day-end counts on the Pro plan. Recipe-based automatic depletion is part of Advanced Inventory, which is coming soon.