Food cost percentage: the formula and what to aim for.
The single number that tells you whether your menu makes money. How to work it out per dish and per month, what range is normal, and how to bring it down.
Updated 5 October 2026
Food cost percentage is ingredient cost divided by selling price, times 100. For a dish: ₹90 of ingredients on a ₹300 dish is 30%. For a month: (opening stock + purchases − closing stock) ÷ food sales × 100. Many restaurants aim for roughly 28% to 35%, but the right number depends on your cuisine and format.
How do you calculate food cost for one dish?
Add up what goes on the plate, at what you paid for it:
| Paneer Butter Masala (1 plate) | Cost |
|---|---|
| Paneer, 150 g at ₹400/kg | ₹60.00 |
| Butter, cream and tomato gravy | ₹24.00 |
| Spices, oil, garnish | ₹6.00 |
| Ingredient cost | ₹90.00 |
| Menu price (before GST) | ₹300.00 |
| Food cost % (90 ÷ 300 × 100) | 30% |
The figures above are an example, not a benchmark. Do this for your top-selling dishes first. Our food cost calculator works it out as you type, and the menu price calculator goes the other way: from ingredient cost to the price you should charge.
How do you calculate food cost for the month?
Recipe costing tells you what a dish should cost. The monthly number tells you what it actually cost:
Food cost % = (Opening stock + Purchases − Closing stock) ÷ Food sales × 100
| Example month | Amount |
|---|---|
| Stock on 1st (counted) | ₹1,20,000 |
| + Purchases during the month | ₹3,60,000 |
| − Stock on 30th (counted) | ₹1,10,000 |
| = Food actually used | ₹3,70,000 |
| Food sales (before GST) | ₹11,00,000 |
| Food cost % | 33.6% |
Count stock on the same day and at the same time each month (for example after closing on the last day). Use sales before GST and before tips. Keep alcohol separate if you serve it.
What is a good food cost percentage in India?
There is no official benchmark. Restaurant trade writing commonly puts food cost between 28% and 35% of food sales, with quick-service and cafés often lower and fine dining higher (Restaurant India, March 2025). Treat that as a rough guide:
- Menu mix matters. A tea and snacks place and a seafood restaurant will never have the same number.
- Your trend matters more. If your food cost moves from 31% to 36% in two months, something changed: prices, portions, wastage or leakage.
- Food cost is one cost. Rent, staff, gas and delivery app commissions all come out of what is left. Our restaurant profit calculator puts them together.
Why is actual food cost higher than recipe food cost?
The gap between the two is money that left the kitchen without a bill. Common reasons:
- Wastage: spoiled stock, burnt or returned dishes, over-prepping.
- Portions bigger than the recipe.
- Staff meals and complimentary dishes that nobody records.
- Supplier prices that went up after you costed the menu.
- Dishes that went out without a bill, or bills cancelled after the guest paid. See how to stop billing fraud.
Seven ways to lower food cost
- Cost your top 20 dishes properly and re-check them when supplier prices change.
- Fix portions with scoops, ladles and scales, and write the portion into the recipe.
- Record wastage every day, with a reason. Patterns show up within weeks.
- Count high-value items weekly: paneer, chicken, mutton, prawns, ghee, cheese.
- Buy against par levels, not habit, so less stock spoils.
- Re-price or redesign low-margin dishes instead of removing them blindly.
- Make sure every dish has a KOT and every KOT has a bill. Read what a KOT is.
Tracking food cost in Venditas
In Venditas inventory, you add a recipe to each dish. Every paid bill then takes the ingredients out of stock, purchases add them back at the price you paid, and each dish shows its food cost. Wastage and stock counts are recorded with names, so the gap between expected and counted stock is visible. It is all included in the ₹3 per order price.
The figures in this guide are examples to show the method, not data from real restaurants.
Sources
- Restaurant India: How to calculate food cost (March 2025), for the formula and the 28–35% range by restaurant type
Quick answers
What is food cost percentage?
It is the cost of ingredients as a share of the selling price. If a dish sells for ₹300 and its ingredients cost ₹90, its food cost is 30%.
How do I calculate food cost percentage for a month?
Opening stock + purchases − closing stock gives what you used. Divide that by food sales for the same period and multiply by 100. Count stock on the same day each month so the numbers compare.
What is a good food cost percentage for an Indian restaurant?
A common rule of thumb is 28% to 35% of food sales, but it depends on the kind of restaurant: quick-service places tend to run lower and fine dining higher. Track your own number month to month rather than chasing a single target.
Does food cost include GST?
Use the selling price before GST. Standalone restaurants at 5% cannot claim input tax credit, so the GST you pay on ingredients is part of what they cost you; include it in ingredient cost.
Why is my monthly food cost higher than my recipe food cost?
The difference is usually wastage, over-portioning, staff meals, complimentary dishes, theft, or prices that changed since you costed the recipe. Comparing the two each month shows how big that gap is.
How can software help with food cost?
If each dish has a recipe, the software can take ingredients out of stock on every paid bill. Comparing that expected stock with a physical count shows what went missing, and each dish shows its food cost as purchase prices change.
Every feature. ₹3 per order.
Billing, KOTs, kitchen screen, QR ordering, stock and reports, on the phones you already have. First 30 days free, no card.