Food cost percentage is calculated with a single formula: divide the ingredient cost by the menu selling price, then multiply by 100. A plate that costs $4.20 to make and sells for $14.00 has a food cost of exactly 30%. That number tells you how much of every dollar of revenue goes directly to the raw ingredients on the plate, before labor, rent, or anything else.
The gross profit per plate is what remains after ingredient cost. On the $14.00 example above, gross profit is $9.80. That $9.80 must still cover labor (typically 30-35% of revenue), overhead, and everything else before any net profit materializes. This is why food cost alone does not define profitability; it is one variable in a larger equation.
Ingredient cost accuracy matters more than most operators realize. Bulk purchase prices must be broken down to per-serving cost, waste and trim yield must be factored in, and incidental ingredients (oils, garnishes, condiments) must be included. Use our recipe cost calculator to build a per-serving cost from individual ingredients before entering it here.
The 28-35% target is widely cited but not universal. Different restaurant segments operate under different economics, and the "right" food cost depends on your revenue model, ticket size, and labor structure. Fast food and QSR operations push food cost down to 25-30% because they compensate with high volume and very low labor cost per transaction. Fine dining accepts 32-38% food cost because the high ticket average absorbs it, and the premium ingredient quality is part of what customers are paying for.
Food trucks and catering operations often target 28-32% because they have lower rent overhead, but higher labor cost per event. Bars and beverage-heavy concepts run much lower food cost percentages, sometimes under 20%, but that figure is misleading without also tracking beverage cost. When evaluating a mixed food-and-drink operation, always look at total COGS rather than food cost in isolation.
When a recipe spans multiple units or servings, ingredient cost per serving changes as you scale. Use our recipe conversion calculator to scale yields accurately, then re-enter the per-serving cost here to see whether your margin holds at different batch sizes.