How do you calculate food cost percentage?

Food cost percentage = cost of goods sold ÷ food sales × 100. Cost of goods sold for a period is beginning inventory + purchases − ending inventory. For one dish, it's plate cost ÷ menu price × 100. A $4.00 plate sold at $13.95 is 28.7%.

What is a good food cost percentage for a restaurant?

The National Restaurant Association's 2024 operator survey put the median at 32.0% of sales for full-service restaurants and 32.4% for limited service, with restaurants over $2 million in sales at 31.0%. The common rule of thumb is 28–35%; pizzerias, bakeries and coffee shops run lower, seafood-heavy fine dining higher. Bars target an 18–24% pour cost.

What is actual vs theoretical food cost?

Theoretical (ideal) food cost is what your recipes say the items you sold should have cost, assuming perfect portions and no waste. Actual food cost is what really left inventory. The gap is waste, over-portioning, errors and theft. Under 2% of sales is well managed; 2–3% is acceptable; 3–5% needs work; over 5% means investigate.

Food Cost Percentage Calculator — Actual vs Ideal, With 2024 Industry Benchmarks

Q: Does food cost include labor?

No. Food cost is ingredients and non-alcoholic beverages only. Labor is measured separately, and the two together are prime cost, which should land around 55–65% of sales.

The formula

Food cost % = cost of goods sold ÷ food sales × 100, where for a period COGS = beginning inventory + purchases − ending inventory. If you opened the month with $12,000 on the shelves, bought $28,000, and closed with $11,500, you used $28,500 of food. On $90,000 of food sales that's 31.7%. For a single item it's plate cost ÷ menu price: the recipe cost calculator gives you the plate cost.

What "good" looks like

Segment	Benchmark	Source
Full-service, all sizes	32.0% median (2024)	National Restaurant Association
Full-service, $2M+ sales	31.0% median	NRA
Full-service, under $2M	33.7% median	NRA
Limited-service (QSR, fast casual)	32.4% median	NRA
General rule of thumb	28–35%	7shifts, Toast, Restaurant365
Pizzeria	25–35% (trade estimate)	FoodTec
Bar pour cost	18–24%; beer ~24%, wine ~28%, spirits ~15%	BevSpot, Toast

Two things about those numbers. First, they're medians, so half of operators are above them, and in the same NRA survey the gap between profitable and loss-making full-service operators showed up most clearly in labor (34.2% vs 42.9% of sales). Second, a lower food cost isn't automatically better. A steakhouse at 38% with a $60 check makes more dollars per seat than a sandwich shop at 27%. The number you actually manage is the gap between what your recipes say and what your inventory says.

Actual vs theoretical

Theoretical (ideal) food cost is the cost of everything you sold, priced from recipe cards at current ingredient prices, assuming perfect portions and zero waste. Your POS mix report times your plate costs gives it to you. Actual food cost is the inventory formula above. The difference is money that left the building without being sold: waste, over-portioning, spoilage, comps that weren't rung, invoice errors, theft. The variance benchmarks used by inventory software are:

Under 2% of sales: well managed. On $90,000 of sales that's under $1,800.
2–3%: acceptable; normal kitchen friction.
3–5%: needs work. Check portioning first, then receiving.
Over 5%: investigate. On $90,000 that's $4,500 a month, or $54,000 a year, unaccounted for.

Enter a theoretical percentage in the period mode and the calculator puts the gap in dollars, monthly and annualized. The usual causes, in order of how often inventory consultants find them: errors (recipes not updated, invoices keyed wrong, transfers not logged), portioning, waste, then theft.

Fixing a high food cost

Find out if it's real. Recount inventory. A miscounted walk-in swings the month by points.
Re-cost the top 20 sellers. Prices moved; recipe cards didn't. USDA expects food inflation to keep running around 3% in 2026.
Weigh portions for a week. A 6 oz protein served at 7 oz is a 17% overrun on the most expensive line.
Reprice or re-engineer the outliers. The menu engineering calculator shows which high-cost items are worth carrying because they're popular and which are just dogs.
Then look at purchasing. Case size, distributor, spec. It's usually the last lever, not the first.

Add labor: what's my prime cost? →

Frequently asked questions

How do I calculate food cost percentage?

COGS ÷ food sales × 100, with COGS = beginning inventory + purchases − ending inventory.

What's a good food cost percentage?

NRA 2024 medians: 32.0% full service, 32.4% limited service. Rule of thumb 28–35%.

What's actual vs theoretical food cost?

Actual is from inventory; theoretical is from recipes. A gap under 2% of sales is well managed; over 5% needs investigating.

Does food cost include labor?

No. Food plus labor is prime cost.

Does food cost include alcohol?

Usually tracked separately as pour cost (18–24% target). The NRA figures are food and non-alcoholic beverages.

How often should I count inventory?

Weekly for the top items, monthly for everything, same time of day each count.

Food Cost Percentage Calculator

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