Guide
How to calculate food cost
The formula takes one line. Getting a number you can price against takes a little more care - this walks through a real recipe end to end, including the two places nearly every hand-costed dish goes wrong.
The formula
Cost per portion = total ingredient cost ÷ portions per batch
Food cost % = (cost per portion ÷ menu price) × 100
That is genuinely all of it. The reason food costing has a reputation for being fiddly is not the arithmetic - it is that the total ingredient cost is harder to pin down than it looks.
A worked example: chicken adobo, 8 portions
Every line converts the purchase price into the quantity the recipe uses, then adds back the share that never reaches the plate.
| Ingredient | You buy | Recipe uses | Trim | Line cost |
|---|---|---|---|---|
| Chicken thigh | ₱220 / kg | 800 g | 12% | ₱200.00 |
| Soy sauce | ₱95 / L | 120 ml | 0% | ₱11.40 |
| Vinegar | ₱60 / L | 90 ml | 0% | ₱5.40 |
| Garlic | ₱45 / 250 g | 40 g | 20% | ₱9.00 |
| Cooking oil | ₱130 / L | 2 tbsp | 0% | ₱3.84 |
| Batch total (8 portions) | ₱229.64 | |||
| Cost per portion | ₱28.71 | |||
At a menu price of ₱95, that portion runs a food cost of 28.71 ÷ 95 × 100 = 30.2% - comfortably inside the 28-35% band most full-service kitchens aim for, leaving ₱66.29 of gross profit per plate to cover labour, gas, rent, and profit.
Note the chicken line. The recipe uses 800g, but at 12% trim you buy about 909g to get it - ₱200 rather than the ₱176 the recipe suggests. That single correction moves the dish by more than a full percentage point.
The food cost calculator runs exactly this table for your own recipe, and does the unit conversion and the trim arithmetic for you.
The two mistakes that make a menu look healthier than it is
1. Converting units in your head
You buy oil by the litre and cook with it by the tablespoon, buy garlic by the kilo and use it by the clove. Each conversion is easy on its own and the errors are small, which is exactly why they survive - nobody checks a line worth four pesos. Across a menu they add up to whole percentage points.
One rule worth keeping: never convert between weight and volume. A kilo of flour is not a litre of flour, and any conversion that crosses that line is a guess wearing a decimal point.
2. Costing what the recipe lists instead of what you bought
A recipe calling for 800g of chicken means 800g on the plate. Bone and fat mean you bought closer to 900g, and you paid for all of it. The same applies to peeled garlic, trimmed beef, and destemmed greens. Cost the purchase, not the plate.
And one thing the number simply does not cover
Food cost is ingredients - no labour, no gas, no packaging, no rent. A dish running at 30% food cost is not a dish making 70% profit. That 70% is gross profit, and everything else in the business still has to come out of it.
Theoretical food cost vs what you actually spend
Everything above gives you theoretical food cost - what your recipes say you should have spent. The actual figure comes from inventory over a period:
Actual food cost % = (opening inventory + purchases − closing inventory) ÷ food sales × 100
The two rarely match, and the gap is the interesting part: waste, over-portioning, staff meals, comps, spoilage, and theft all live there. A gap of one or two points is ordinary. Five or more usually means portioning is not controlled - the recipes are fine, but what leaves the kitchen does not match them.
Which is why costing recipes is the start rather than the end. Once the theoretical number is right, the number worth watching is the distance between it and reality - and that needs a record of what was actually sold, which is what a food ordering manager keeps for you.
Do it for your own menu
Common questions
What is the formula for food cost?
Cost per portion = total cost of the ingredients in a recipe ÷ the number of portions the batch makes. Food cost percentage = (cost per portion ÷ menu price) × 100. Everything else in food costing is about making sure the first number is honest.
How do I convert between the unit I buy in and the unit I cook in?
Work out the cost of one base unit, then multiply by how many you use. Chicken at ₱220 per kilo is ₱0.22 per gram, so 800g costs ₱176. Never convert between weight and volume - a kilo of flour and a litre of flour are not the same thing, and any tool that offers to do it is guessing.
How does trim waste change the calculation?
Trim waste is what you buy but never plate - bone, peel, fat, stalks. If a recipe needs 800g of chicken on the plate and 12% is bone and fat, you had to buy about 909g to get it. Cost the amount purchased, not the amount plated, or every dish looks cheaper than it is.
What is the difference between theoretical and actual food cost?
Theoretical food cost is what your recipes say you should have spent. Actual food cost comes from inventory: beginning inventory + purchases − ending inventory, divided by sales. The gap between them is waste, over-portioning, staff meals, comps, and theft. A point or two is normal; five or more means portioning is not under control.
How often should I recalculate food cost?
Recost your top sellers whenever a major supplier price moves, and review the whole menu quarterly. Ingredient prices drift constantly and menus rarely follow, so a dish costed a year ago is usually running several points higher than the menu assumes.
Should food cost include labour or packaging?
No. Food cost is ingredients only. Labour is tracked separately, and the two together give you prime cost. Packaging belongs with delivery and takeaway costs. Folding them into food cost makes the number incomparable to any benchmark you will read.
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