Menu price from cost & target margin. The Menu Pricing Calculator takes food cost of the dish, target food cost percentage, tax to add for the displayed price (0 if prices are pre-tax) and returns menu price plus price before tax, gross profit per dish, equivalent markup on food cost. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
Hospitality runs on thin margins and high fixed costs, so food cost, labour cost and occupancy need watching weekly rather than yearly. Small pricing and portioning changes move the bottom line quickly. Use the worked example below to check the maths against your own figures.
How the Menu Pricing Calculator works
Pricing from a target food-cost percentage keeps every dish contributing its share to labour, rent and profit. Round the result to a price point that reads well (e.g. 13.95).
Worked example
With the example values (food cost of the dish of $4.20, target food cost percentage of 30%, tax to add for the displayed price (0 if prices are pre-tax) of 0%), the menu price is $14.00; price before tax $14.00, gross profit per dish $9.80, equivalent markup on food cost 233.33%. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
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Frequently Asked Questions
How is menu price calculated?
menu price = food cost ÷ target food cost percentage.
Which figures do I need?
Food cost of the dish, target food cost percentage, tax to add for the displayed price (0 if prices are pre-tax). Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
What benchmarks should I aim for?
Food cost around 28–35% of price, prime cost (food plus labour) under 60–65% of revenue, and steady occupancy or table turns. Track them weekly.
