How do I work out the food cost of a menu item?
Food cost is the cost of the ingredients in one portion divided by its menu price before sales tax. It is worked out from the recipe card, at net weight. Below: the formula and a complete example.
Short answer
- List every ingredient at its net weight, exactly as it lands on the plate.
- Multiply each net weight by its unit price and add the lines.
- Add technical loss from cleaning, trimming and cooking.
- Divide by the menu price before sales tax.
- Food cost % = production cost ÷ menu price before tax × 100. Set your target from your own numbers.
A complete example: one portion of carbonara
Recipe card with net weights, purchase prices and plated cost (illustrative figures)
| Ingredient | Net weight | Purchase price | Plated cost |
|---|---|---|---|
| Spaghetti | 120 g | $9.00/kg | $1.08 |
| Guanciale | 60 g | $45.00/kg | $2.70 |
| Egg yolks (2) | 40 g | $0.55 each | $1.10 |
| Pecorino | 30 g | $90.00/kg | $2.70 |
| Final cost (incl. 5% technical loss) | 250 g | — | $8.22 |
The calculation, step by step
The raw materials add up to $7.83. With 5% technical loss, the production cost of the portion is $8.22.
The illustrative menu price is $38.00 before sales tax. Food cost is then $8.22 ÷ $38.00 × 100 = 21.6%.
That means $8.22 of every $38.00 in sales goes on ingredients.
What the rules say
- Sales tax varies by province. Work out food cost on the price before tax, and confirm the rules with your accountant.
- Check with your provincial consumer-protection office and health authority on what your menu must show.
Common mistakes
- Dividing by the price with tax included, which makes the result look better than it is.
- Using the gross weight from the supplier invoice instead of the net weight on the plate.
- Looking only at the percentage and ignoring how many dollars remain from each portion sold.
How 4restaurants.net helps
- Production cost is calculated from the recipe card, using your own weights.
- Food cost is shown for each dish, in the same application as the reports by dish.