Food Cost: How to Calculate and Control It

The menu looks good, the dining room is full, and at the end of the month you are left with less than you assumed. Most often the culprit is food cost, that is, the share of the cost of raw materials in the selling price. You do not see it on the receipt, but it decides how much of every zloty from the kitchen is left for salaries, rent and your own pay. This post shows how to calculate the food cost of a dish and of a whole month, what a typical level is, how to tell it apart from margin and when to raise prices. All calculations are worked step by step on example figures.

In brief

• Food cost is the cost of raw materials divided by sales revenue, both excluding VAT. You express the result as a percentage.

• You calculate it twice. Theoretically from recipes and portion weights, and actually from stock levels and purchases. The difference between the results shows how much you lose in the kitchen.

• As a guide, food cost in a restaurant falls in the range of 28-35%. The sources are mostly foreign and the result depends on the concept, so treat this as a point of reference.

• A food cost of 30% means a margin on raw materials of 70%, but that is not profit. From that amount you still pay for staff, rent, utilities and fees.

• Losses come from specific places: processing waste, over-portioning, expired stock and mistakes at delivery. Some of them are limited by the HACCP system.

Food cost: the formula and what exactly you calculate

The simplest version of the formula looks like this:

food cost (%) = cost of raw materials ÷ sales revenue × 100

Three rules that save mistakes:

• Everything net. You convert purchase costs and menu prices excluding VAT, because VAT is neither your revenue nor your cost. Confirm the VAT rate for your sales with your accountant.
• Food separately from drinks. Drinks have a different cost structure. A shared indicator blurs the picture.
• The same period in the numerator and the denominator. You divide January's purchases by January's sales, not February's.

Distinguish two concepts. Theoretical food cost comes from recipes: the cost of a portion times the number of portions sold. It does not include losses outside the recipe. Actual food cost comes from the stockroom: opening stock plus purchases minus closing stock, divided by sales. It includes everything that disappeared from the shelf.

Example: the food cost of one dish

We will calculate a chicken fillet with potatoes, coleslaw and sauce. The purchase prices are examples and do not reflect the market. Substitute your own from invoices.

Ingredient	Portion weight	Purchase price (net)	Cost in a portion
Chicken fillet	200 g	PLN 26.00/kg	PLN 5.20
Potatoes	250 g	PLN 3.60/kg	PLN 0.90
Coleslaw (cabbage, carrot, extras)	120 g	PLN 7.00/kg	PLN 0.84
Cream sauce	60 ml	per recipe	PLN 0.95
Oil, breadcrumbs, spices	portion	per recipe	PLN 0.90
Total cost of raw materials			PLN 8.79

Let us assume a menu price of the dish of PLN 30.00 net (that is, the price on the menu is this amount plus VAT). The calculation: 8.79 ÷ 30.00 = 0.293, that is 29.3%.

This is theoretical food cost. It has one flaw: it assumes that you bought exactly 200 g of meat that ended up on the plate. In the kitchen it does not work that way.

Processing losses: the yield of the raw material

You buy the fillet with membrane, pieces of fat and trimmings that you will not serve. We assume that from a kilogram 920 g of usable meat remains, that is a yield of 92%. This is also an example. Weigh your own batch to learn the real figure.

1. Price of a usable kilogram: PLN 26.00 ÷ 0.92 = PLN 28.26.
2. Cost of 200 g of usable meat: 0.2 × 28.26 = PLN 5.65 (instead of PLN 5.20).
3. New cost of the portion: PLN 8.79 − PLN 5.20 + PLN 5.65 = PLN 9.24.
4. New food cost: 9.24 ÷ 30.00 = 30.8%.

One item on the menu and a difference of one and a half percentage points. When you have a dozen or so similar dishes, the error starts to weigh in the monthly amount. That is why a costing sheet should contain a "yield" column or the weight of the raw material before processing. Weigh the portion weights from the recipe, do not judge by eye. Over-portioning by 20 g of meat per portion costs, at a price of PLN 26/kg, an extra PLN 0.52, that is almost as much as the wrong yield calculation.

Food cost of a whole month: from stock levels

Recipes show how much should have disappeared. The stockroom shows how much disappeared. Calculate actual food cost once a month, on the same day, after a stocktake.

Item	Amount (net)
Stock at the start of the month	PLN 12,400
Purchases in the month	PLN 41,800
Stock at the end of the month	PLN 11,200
Consumption of raw materials (12,400 + 41,800 − 11,200)	PLN 43,000
Food sales in the month	PLN 138,000
Actual food cost (43,000 ÷ 138,000)	31.2%

Now compare with theory. If the average food cost from recipes is 29.3%, then with sales of PLN 138,000, PLN 138,000 × 0.293 = PLN 40,434 should have disappeared. PLN 43,000 disappeared. The difference is PLN 2,566, that is 1.9 percentage points. This amount is the losses that are not visible in recipes: expired products, over-portioning, mistakes in deliveries, dishes thrown away, staff meals and samples, if you take them. In a restaurant, taking samples is voluntary, and we described the details in the post on food samples.

The result does not say where the hole is. It says that there is one. The next step is to break consumption down into categories: meat, fish, dairy, vegetables, dry goods. Then you see which group deviates from the plan.

What food cost is normal

Industry guides reviewed on 2 November 2026, mainly English-language, most often give a range of 28-35% for restaurants. Differences depend on the type of venue: a fast-food bar can be lower, and a cafe or bakery higher. One Polish study on menu planning takes as a target a food cost no higher than 35%. Two reservations apply here:

• There is no provision or official standard. These are approximate points of reference from the literature and practice, not data on the Polish market from an official source.
• Compare your own result with your own history and your own plan. A venue with expensive ingredients and an expensive price has a different break-even point than a venue with a simple menu and low prices.

Margin in foodservice versus food cost: markup and multiplier

The concepts are often mixed up. Margin is calculated from the selling price, markup from the purchase cost. Both follow from food cost:

• margin on raw materials = 100% − food cost
• markup = (price − cost) ÷ cost = margin ÷ food cost
• multiplier price ÷ cost = 1 ÷ food cost

Food cost	Margin on raw materials	Markup on raw materials	Price = cost times
25%	75%	300%	4.00
30%	70%	233%	3.33
35%	65%	186%	2.86
40%	60%	150%	2.50

Beware of a trap. "A 70% margin" sounds great, but it is the margin on raw materials, not the venue's profit. From those 70% you cover labour costs, rent, utilities, fees, depreciation of equipment and waste. That is why margin in foodservice as a single number without context says nothing. You assess it together with fixed costs.

Where the money escapes and what HACCP has to do with it

Most food cost losses can be assigned to a few places. Some of them are closed by procedures that you have to have anyway:

1. Goods receiving. A badly checked delivery is a product that you throw away or cannot return. Checking the temperature, date and condition of packaging at delivery lets you make a claim on the goods before they enter the stockroom. See the goods receiving checklist and the delivery register template.
2. Expired stock. Rotation by use-by date reduces the number of products that end up in the bin. Details in the text on FEFO in foodservice.
3. Improper storage. Regulation 852/2004 requires raw materials to be stored in conditions that prevent spoilage and contamination (Annex II, Chapter IX, point 2). Spoiled goods are a direct cost.
4. Thawing. The regulation requires food to be thawed in such a way as to minimise the risk of growth of micro-organisms (Chapter IX, point 7). A failed thaw is goods thrown away. The rules are described in the post on freezing and thawing.
5. Over-portioning and no scale. A spoonful of sauce too much, an extra 30 g of chips. Individually nothing, in a month an amount.
6. Staff meals, tastings and dishes thrown away after a complaint. Enter them in a separate register, so that they do not falsify food cost.

HACCP is not for calculating costs, but its records show where goods disappear: the delivery, temperature and rotation registers. If you want to organise these registers in one place, in GastroReady you will find ready-made templates to adapt to your venue.

When to raise prices

Do not wait for the moment when money runs short. Set the signals in advance:

1. Actual food cost exceeds your threshold two months in a row, and after checking losses it is still too high.
2. The price of a key raw material has risen and makes up a large part of the cost of the dish (in our case the chicken fillet makes up more than half of the portion cost).
3. The supplier's prices have changed and you have no cheaper substitute of the same quality.

Calculate the effect. Let us assume that the raw material costs of the dish rose by 8%: from PLN 9.24 to PLN 9.98 (9.24 × 1.08). At a price of PLN 30.00 net, food cost jumps from 30.8% to 33.3% (9.98 ÷ 30.00). To return to 30.8%, the price must be 9.98 ÷ 0.308 = PLN 32.40 net, that is 8% more. When other costs also rise, the increase must be larger.

A price increase is one of the options. Others are changing the portion weight or composition, changing the supplier, or shifting sales towards dishes with a better indicator. Before you change the composition, check whether the dishes change the allergen declaration in the menu, because then you must update the information for the guest. The text on allergens in the menu helps here.

Frequently asked questions

How do I calculate food cost?

Divide the cost of raw materials by sales revenue (both net) and multiply by 100. For a dish: the recipe cost divided by the net price. For a month: (opening stock + purchases − closing stock) divided by food sales.

What food cost is good in a restaurant?

As a guide 28-35%, according to the industry guides reviewed, mostly foreign. The specific target depends on the type of venue, the menu and prices. Compare yourself with your own plan and history.

What is the difference between margin and markup in foodservice?

Margin is calculated from the selling price, markup from the purchase cost. With a food cost of 30%, the margin on raw materials is 70% and the markup about 233%. These are different bases of the same difference between price and cost.

Must food cost be calculated with VAT?

No. You calculate without VAT, both costs and revenue. VAT is neither your cost nor your revenue.

What should I do when actual food cost is higher than theoretical?

Break consumption down into categories and check them one by one: deliveries, raw material yield, portion weights, expiries, staff meals, dishes thrown away. The difference is the sum of losses that are not in the recipe. In the example it was PLN 2,566 a month.

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Legal status as of: 2 November 2026
Legal basis: the post is financial in nature. The only provisions cited are Regulation (EC) No 852/2004 (Annex II, Chapter IX, points 2 and 7, checked in the Polish consolidated version). The food cost ranges (28-35%) come from industry guides, mainly foreign, and are approximate; we found no official data on food cost in Poland. The prices, portion weights, raw material yield and monthly data in the examples are examples and serve to show the calculation. Confirm the VAT rate for your sales with your accountant.
Last review: 2 November 2026