How to Calculate Food Cost Percentage?

If you run a restaurant, this is one number you can't ignore. It shows how much of the money you make from a dish actually goes back out the door just to pay for the ingredients.

The math is simple- Food Cost Percentage = (Cost of Ingredients ÷ Selling Price) × 100

So say you sell a burger for $12, and the stuff that goes into it (the patty, the bun, cheese, lettuce, sauce, all of it) costs you $3. Divide 3 by 12, multiply by 100, and you get 25%. That means a quarter of what the customer pays is going toward ingredients.

Cost of ingredients: just means everything that goes into the plate. Not just the main protein, but the veggies, the garnish, the sauce, even the little bit of salt and oil you use. It all adds up, so don't skip the small stuff.

Selling price: is what's on the menu, before tax.

Now, there's a difference between what your food cost should be and what it actually is. Your ideal food cost is the number you get when you follow the recipe exactly and use current ingredient prices. Your actual food cost is based on what you really bought and used over a certain stretch of time, like a week or a month. These two numbers rarely match perfectly.