How to calculate food cost percentage
Food cost % = Ingredient cost ÷ Menu price × 100
Example: a dish with $3.00 of ingredients sold at $10.00 has a 30% food cost — meaning 30 cents of every dollar goes to ingredients, and $7.00 is gross profit (before labour, rent, and waste).
What's a good food cost percentage?
Most cafés and restaurants target roughly 25–35%. Lower means more gross profit per dish; too low can mean you're underserving or overpricing. To work backwards from a target, use:
Suggested price = Ingredient cost ÷ (Target % ÷ 100)
Tips for keeping food cost in check
- Cost your recipes including the small stuff (oil, garnish, packaging).
- Re-check costs when supplier prices move — your margin moves with them.
- Track which dishes actually sell, not just which look profitable on paper.
Track it without the spreadsheet
TallyRun stores cost and price per item and records every sale, so your food cost and profit stay current automatically — private and offline, right on your phone.