Food Cost Percentage Calculator
The true food cost percentage of a menu item — ingredient cost over the ex-GST price — with the gross profit it leaves and the menu price a target percentage implies.
Food cost percentage is the ingredient cost divided by what you keep of the menu price, which is the price ex-GST when the menu price includes GST.
How the food cost percentage calculator works
Food cost percentage is the ingredient cost divided by what you keep of the menu price, which is the price ex-GST when the menu price includes GST. The number computed on the GST-inclusive price looks lower and is the wrong one. Gross profit is the ex-GST price less the ingredient cost; food cost and gross profit percentages add to 100. To hit a target percentage, price the item at cost ÷ target, then add GST back.
Formula: FCP = Ingredient cost ÷ (Menu price ÷ 1.1) × 100 · Suggested = Cost ÷ target × 1.1
How food cost percentage is worked out
Cost ÷ price, with GST handled first
Food cost percentage = ingredient cost ÷ menu price × 100. That's the whole idea — what a plate costs you to make, expressed as a share of what you sell it for. The catch in Australia is GST. Menu prices normally include 10% GST, which isn't yours to keep — you remit it to the ATO — so the true food cost divides the price by 1.1 first to get the ex-GST revenue you actually earn. To price the other way round, a suggested price = ingredient cost ÷ target %. And because everything above the ingredient cost is gross profit, food cost % and gross profit % always add to 100.
Worked example
A dish costs $6 in ingredients and sells for $22 inc-GST. Divide by the menu price and it looks like 27.3% (6 ÷ 22). But strip the GST — 22 ÷ 1.1 = $20 ex-GST — and the true food cost is 30% (6 ÷ 20), leaving $16 gross profit on the plate. Turn it around: to hit a 30% target you'd price the dish at 6 ÷ 0.30 = $20 ex-GST, which is $22 on the menu once GST is added. Same numbers, three different questions answered.
Food cost isn't your only cost. Labour, rent, power and wastage all come out of the gross profit, so a healthy food cost % is necessary but not sufficient. Use it alongside your profit margin and break-even numbers, not on its own.
What % to aim forGST, menu pricing and gross profit
Why GST changes the number
Australian menu prices are almost always GST-inclusive, but the 10% GST belongs to the ATO, not you. Measuring food cost against the sticker price flatters the figure — a $22 dish is really $20 of revenue to your business. Always divide a GST-inclusive price by 1.1 before working out the true food cost, or you'll price and report on a number that's about a tenth too generous.
Pricing to a target
To set a price from a target food cost, use ingredient cost ÷ target % for the ex-GST price, then add GST for the menu. A $6 dish at 28% is 6 ÷ 0.28 = $21.43 ex-GST, about $23.60 on the menu. Round to a sensible price point and check it against your neighbours — the maths gives you the floor, the market sets the ceiling.
Food cost and gross profit are two sides of one coin
Because gross profit is simply revenue less the cost of the food, food cost % + gross profit % = 100%. A 30% food cost is a 70% gross profit margin on the plate. That gross profit is what pays for everything else — wages, rent, power, waste — so watch both numbers together, and remember a lower food cost % only helps if it doesn't cost you sales.
Frequently asked Frequently asked questions
Where these figures come from
Food cost percentage is a standard hospitality management measure, not a legislated figure. The method here follows mainstream restaurant cost-accounting practice, with the GST handling set to Australia's 10% goods and services tax.
- Food cost % — ingredient (plate) cost ÷ menu price × 100; measured against the ex-GST price for a true figure.
- GST — Australia's goods and services tax is 10%; a GST-inclusive price ÷ 1.1 gives the ex-GST revenue you keep.
- Suggested price — ingredient cost ÷ target food cost %, for the ex-GST price (add 10% for the menu).
- Benchmarks — typical planning ranges: cafés ~25–28%, restaurants ~28–32%, beverages ~20%. Food cost % + gross profit % = 100%.
- Further guidance — business.gov.au — Australian government business guidance.
Last checked: July 2026. This is a planning estimate, not financial or tax advice. Benchmarks vary by venue, produce and region — use your own recipe costs and confirm your GST treatment with your accountant or the ATO.
Understanding your resultSelect the question that matches where you are right now.
The headline number is the dish's true food cost percentage — the ingredient cost as a share of the ex-GST menu price. The breakdown shows the ex-GST revenue, the gross profit in dollars and as a percentage, and a suggested price to hit your target.
What to do with itCompare it to your target and your café/restaurant benchmark. If it's high, either the plate costs too much to make or the price is too low — the suggested price tells you where it would need to sit.
What it is notIt's not your total cost or your net profit. Labour, rent, power and wastage still come out of the gross profit, and it isn't tax advice — confirm GST treatment with your accountant.
Why GST mattersMeasuring against the inc-GST price understates food cost by about a tenth. The true figure divides the price by 1.1 first, so you price and report on the revenue you actually keep.
Three things move the percentage: what the plate costs you, what you charge, and whether GST is stripped out first.
Ingredient costPortion sizes, recipe consistency and supplier pricing all feed the plate cost. Standardise recipes so every serve costs the same — variance is where margin quietly leaks.
Menu priceA dollar on the price moves the percentage on every serve. Price to a target, then check it against the market — the maths sets the floor, demand sets the ceiling.
GST & the targetWhether prices include GST changes the true figure by ~10%. Your target food cost % turns the same inputs into a suggested price, so you can price forward or check backward.
A few habits keep food cost honest across the whole menu, not just one dish.
Cost every recipeWork out the plate cost for each menu item, not a rough average. The blended food cost across what actually sells is the number that hits your P&L.
Cut waste and varianceSpoilage, over-portioning and trim all raise the real food cost above the recipe. Buy to par, use standard scoops and weigh key ingredients.
Engineer the menuPush the dishes that are both popular and high-margin, and rework or reprice the ones that are neither. Small shifts in mix move the blended percentage.
Food cost is one lever. Model the rest of the business alongside it.
The full marginTurn food cost into an overall profit margin.
Profit margin calculator → Cover your costsFind the sales you need to break even.
Break-even calculator → Get the GST rightAdd or strip 10% GST on any figure.
GST calculator → Related calculators 📈Profit MarginMarkup & margin 🧾GST CalculatorAdd or strip 10% ⚖️Break-EvenSales to cover costs 🚀Business StartupSet-up cost plan 🏦Business LoanFund the fit-out 💼Business ValuationWhat it's worth You might also be interested in 📈Profit MarginMarkup & margin 🧾GST CalculatorAdd or strip 10% ⚖️Break-EvenCover your costs 🚀Business StartupPlan the set-up 🏦Business LoanFund the fit-out 💼Business ValuationWhat it's worth Rate this calculatorQuick answers
What is food cost percentage? Ingredient cost ÷ price
Food cost percentage is a dish's ingredient cost divided by its selling price. A plate costing $6 in ingredients sold for $22 is 6 ÷ 22 = 27.3%. It's the single most-watched number in a kitchen because it directly sets gross profit: the lower the food cost %, the more of each sale you keep. The flip side is gross profit — here $16, or 72.7% of the menu price. Track it per dish and across the whole menu.
| Formula | cost ÷ price |
|---|---|
| $6 / $22 | 27.3% |
| Gross profit | $16 (72.7%) |
- Lower % More profit
- Watch Per dish + menu-wide
The GST trap in food costing Divide the price by 1.1
Australian menu prices include GST, but your ingredient cost is a pre-GST figure — so comparing them directly understates your true food cost. A $22 plate is really $20 of revenue once you remit the $2 GST. So the true food cost on a $6 plate is 6 ÷ 20 = 30%, not the 27.3% the menu price suggests. That 2.7-point gap is pure illusion. Always cost and price ex-GST if you're GST-registered, or the numbers flatter you.
| Menu (inc-GST) | $22 |
|---|---|
| Ex-GST revenue | $20 |
| True food cost | 30% not 27.3% |
- Divide price By 1.1
- Gap ~2–3 points
Pricing to a target food cost Cost ÷ target %
To price a new dish, divide its ingredient cost by your target food cost percentage. At a 30% target, a $6 plate should sell for 6 ÷ 0.30 = $20 ex-GST, or $22 on the menu. A café aiming for a tighter 28% would price the same plate at about $21.43 ex-GST. This works backwards from the margin you need rather than guessing a price — the disciplined way to build a menu that actually makes money.
| At 30% target | $20 ex → $22 menu |
|---|---|
| At 28% target | $21.43 ex-GST |
| Formula | cost ÷ target |
- Price from Margin, not guesswork
- Add GST for the menu
What food cost % should I aim for? Cafés 25–28% · restaurants 28–32%
Benchmarks vary by format. Cafés typically run 25–28% food cost, casual restaurants and pubs 28–32%, and fine dining can go higher on premium ingredients but claws it back on labour and price. Beverages are much cheaper to pour — around 20% — which is why drinks subsidise food. Above ~35% food cost, a venue is usually either under-pricing or over-portioning. The goal is a blended cost across the menu that leaves room for wages and rent.
| Café | 25–28% |
|---|---|
| Restaurant | 28–32% |
| Beverage | ~20% |
- Above 35% Re-price / re-portion
- Drinks Subsidise food
Food cost % vs gross profit They add to 100%
Food cost percentage and gross profit percentage are two sides of the same coin — they add up to 100%. A 30% food cost means 70% gross profit; a 27.3% food cost means 72.7%. Gross profit is what's left to cover wages, rent, power and everything else before net profit (typically just 5–7% in hospitality). That thin net margin is exactly why a couple of points of food cost — through wastage, over-portioning or supplier price creep — matters so much.
| Food cost 30% | GP 70% |
|---|---|
| Food cost 27% | GP 73% |
| Net margin | ~5–7% |
- GP covers Wages, rent
- Small slips Hurt net a lot
How to lower food cost % Portion, waste, price, suppliers
Four levers move food cost. Portion control (a consistent scoop or scale beats eyeballing), cutting waste and spoilage (better prep, rotation and using trim), smarter pricing (nudge the dishes with the worst cost %), and supplier negotiation or menu engineering toward high-margin dishes. Costing every component — including oil, garnish and the ~2–5% you lose to prep and wastage — is what separates a real food cost from an optimistic one.
| Biggest levers | Portion + waste |
|---|---|
| Cost everything | Oil, garnish, trim |
| Prep/waste loss | ~2–5% |
- Consistent portions Protect margin
- Menu-engineer Push high-GP dishes
Worked examples
| Inputs | Food cost % | Note |
|---|---|---|
| Ingredients costing 6 on a dish priced at 22 | 30% | 30% true food cost |
| The same dish priced ex-GST | 27.3% | 27.3% |
FAQFrequently asked questions
What food cost percentage should you aim for?
There's no single "right" number — it depends on your venue, your produce and your other costs. These are the widely used planning benchmarks: Cafés — ~25–28% . Simpler menus and high volume keep food cost lower; coffee and retail lift the blended margin. Restaurants — ~28–32% . More complex dishes and better produce push it up; fine dining can sit higher still. Beverages — ~20% . Drinks carry a much higher margin than food, which is why the bar often carries the kitchen. Treat these as a starting range, not a target to chase blindly. A dish at 35% can be fine if it's a hero item that fills seats; a 22% dish can still lose money if labour to prep it is high. What matters is the blended food cost across the menu, and whether food, labour and overheads together leave a profit. Set your target in the calculator and price to it, then review the mix. GST, pricing & gross profit
How do I calculate food cost percentage?
Food cost percentage is the ingredient (or plate) cost divided by the menu price, times 100. If a dish costs you $6 in ingredients and sells for $22, that's 6 ÷ 22 = 27.3% on the menu price. In Australia menu prices normally include 10% GST, so for a true, comparable figure you divide the price by 1.1 first: 22 ÷ 1.1 = $20 ex-GST, and 6 ÷ 20 = 30%. Always compare like with like — either both figures GST-inclusive or both ex-GST.
What food cost percentage should a restaurant aim for?
A common target is 28–32% for a restaurant, 25–28% for a café, and around 20% for beverages (drinks carry a much higher margin than food). These are guides, not rules — a fine-dining venue with expensive produce may run higher, while a high-volume café keeps it lower. What matters is that food, labour and overheads together leave a profit, so pick a target that works for your whole cost structure and price to it.
How does GST affect food cost?
Australian menu prices are normally GST-inclusive, but the 10% GST isn't yours to keep — you remit it to the ATO. So the true food cost should be measured against the ex-GST price. Divide a GST-inclusive menu price by 1.1 to strip the GST out, then divide the ingredient cost by that figure. A $22 inc-GST dish is really $20 of revenue to you, so a $6 ingredient cost is 30% of the ex-GST price, not the 27.3% you'd get by dividing by $22.
How do I price a menu item?
Work backwards from a target food cost percentage: suggested ex-GST price = ingredient cost ÷ target %. A $6 dish at a 30% target is 6 ÷ 0.30 = $20 ex-GST, which is $22 once you add 10% GST for the menu. Then sanity-check the number against your market and your other prices, and remember the food cost only covers ingredients — labour, rent and wastage still have to come out of the gross profit.
How do I lower my food cost percentage?
Tighten portions and standardise recipes so every plate costs the same, cut wastage and spoilage, review supplier pricing and buy to par levels, and re-engineer the menu toward higher-margin dishes. You can also lift the price where the market allows. Small changes compound: shaving a dollar of ingredient cost or adding a dollar to the price on a popular dish moves the percentage and the gross profit on every single serve you sell. Sources
The sources behind this calculator
- Corporate Finance Institute — EBITDA — why EBITDA is a non-GAAP measure with no single definition
- US SEC — Non-GAAP Financial Measures, Compliance & Disclosure Interpretations — the disclosure rules that exist precisely because EBITDA is not standardised
- Australian Securities and Investments Commission — the Australian corporate regulator
Last checked: July 2026. These are standard management-accounting definitions; where a term has no single agreed definition, the page says so.