How to Calculate Food Cost Percentage for a Restaurant

The per-item food cost formula

Food cost percentage shows how much of a menu item’s selling price goes to ingredients. You can calculate it for one dish or for the whole restaurant over a period; the two calculations answer different questions.

For a single menu item, add the cost of all ingredients in the dish, divide that total by the menu price, and multiply by 100.

If the chicken price rises by $0.80 per portion, the ingredient cost becomes $7.30:$7.30 ÷ $22.00 × 100 = 33.2%At 200 portions per week, that change adds $160 per week, or $8,320 over 52 weeks. This is an illustrative calculation; use your current recipe, portion, supplier, and menu-price records when making an operating decision.

When to recalculate food cost

Recalculate a dish when you add a new menu item, receive a supplier price change, complete a weekly or biweekly inventory count, or review the menu using both margin and popularity.

Calculating the per-item cost before a dish reaches the menu gives you a current starting point. Rechecking it when prices, portions, or recipes change helps keep the number current. For a broader view, read the complete food cost guide or review menu engineering.

Per-item versus overall food cost

The per-item formula measures one dish. Overall restaurant food cost measures ingredient spending across a period:

For example, if beginning inventory is $8,000, purchases are $5,200, ending inventory is $6,800, and total food sales are $21,000:

($8,000 + $5,200 − $6,800) ÷ $21,000 × 100 = 30.5%

Both numbers are useful. Per-item food cost helps identify which dishes are expensive relative to their prices. Overall food cost shows how the operation is tracking as a whole. If the overall number rises while recipe costs remain stable, review waste, theft, or over-portioning before changing a menu price.

A practical next step

Record the current recipe cost and selling price for each dish, calculate the percentage, and note the date and assumptions behind the calculation. Revisit the result whenever an ingredient price, portion, recipe, or menu price changes.

For the formulas in one place, read the complete food cost formula reference.