Restaurant Profit Margin Calculator

Enter sales and costs from the same accounting period. The calculator returns gross profit, gross margin, net operating profit, net margin, and the amount kept per revenue dollar. No signup is required and the figures are calculated in your browser.

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Calculate gross and net profit margin

Use one consistent period—week, month, or year—for every amount. Your figures stay in this browser and are not submitted.

Net sales / revenueSales after discounts and refunds; exclude sales tax collected.Cost of goods sold (COGS)Food, beverage, and packaging used for these sales.LaborWages, payroll taxes, benefits, and contractor labor.OccupancyRent, common-area charges, and property costs.Other operating expensesUtilities, fees, insurance, marketing, repairs, and other costs.

Gross profit

$28,000

70.0% gross margin

Net operating profit

$2,400

6.0% net margin

Total operating costs

$37,600

94.0% of revenue

Revenue kept per $1

$0.06

after entered operating costs

Gross Margin vs. Net Margin

Gross margin measures what remains after subtracting only your cost of goods sold (COGS) — the raw ingredients — from revenue. If your restaurant did $40,000 in food sales last week and spent $12,000 on ingredients, your gross profit was $28,000 and your gross margin was 70 percent.

Gross Margin % = (Revenue − COGS) ÷ Revenue × 100

($40,000 − $12,000) ÷ $40,000 × 100 = 70%

Net margin, on the other hand, includes everything: COGS, labor, rent, utilities, insurance, marketing, equipment leases, credit card processing fees, and every other expense. If those same $40,000 in sales came with $12,000 in food costs, $12,800 in labor, $4,000 in rent, $1,600 in utilities, and $7,200 in other overhead, your total expenses were $37,600. Net profit: $2,400. Net margin: 6 percent.

Net Margin % = (Revenue − All Expenses) ÷ Revenue × 100

($40,000 − $37,600) ÷ $40,000 × 100 = 6%

That is the reality of restaurants: 70 percent gross margin sounds great, but after everything else, you keep six cents of every dollar. This is why understanding both numbers matters. Gross margin tells you whether your menu pricing is right. Net margin tells you whether the business is viable.

How to read your result

Positive net margin: the entered period produced an operating profit after the costs you included.
Zero: the entered revenue exactly covered the entered costs.
Negative net margin: the period produced an operating loss; review the largest cost categories and confirm nothing was double-counted.

Compare the same restaurant and the same accounting definitions over time. For menu-level diagnosis, calculate food cost percentage per item. Read our complete food cost guide for the related formulas and workflow.

See Your Real Margins

Enter your menu items and ingredient costs. Our calculator shows food cost percentages, contribution margins, and identifies which items are dragging your profitability down.

Calculate Your Margins

Frequently asked questions

Does the restaurant profit margin calculator store my figures?

No. The calculation runs in your browser and the sales and cost figures you enter are not submitted. You can use weekly, monthly, or annual figures as long as every input covers the same period.

What is the difference between gross and net profit margin?

Gross margin is sales minus cost of goods (mainly food and beverage). Net margin is what remains after all costs — labor, rent, utilities, and overhead — are subtracted from sales.

How do you calculate restaurant profit margin?

Net Profit Margin = (Total Sales − Total Costs) ÷ Total Sales × 100. Total costs include cost of goods sold, labor, occupancy, and operating overhead.

Should sales tax be included in restaurant revenue?

Use net sales after discounts and refunds, and exclude sales tax collected for the government. Keep the same accounting definitions whenever you compare periods.