How to calculate food cost percentage

Last updated: October 21, 2026 · By the Varastiq team

Key takeaway: Food cost percentage = (beginning inventory + purchases − ending inventory) ÷ food sales × 100. The top half of the formula is your cost of goods sold (COGS), meaning the food you used, not the food you bought. For reference, the National Restaurant Association reported a median food and non-alcoholic beverage cost of 32.0% of sales for full-service restaurants in 2024. Your best target is your own theoretical food cost.

Want the answer without the arithmetic? Use the free food cost calculator.

What is the food cost percentage formula?

COGS = Beginning inventory + Purchases − Ending inventory
Food cost % = COGS ÷ Food sales × 100

• Beginning inventory: the dollar value of food on hand at the start of the period. It's the same number as last period's ending inventory.
• Purchases: every food invoice received during the period, net of credits.
• Ending inventory: the dollar value of food on hand at the end of the period, from a physical count.
• Food sales: net food sales for the same period, after discounts and comps, before tax and tips.

How do you calculate food cost percentage, step by step?

1. Pick a period and stick to it. Monday to Sunday is common. Inventory, invoices and sales must all cover the same days.
2. Start with beginning inventory. Take last period's ending count value. Don't re-count.
3. Add purchases. Total every food invoice received in the period. Subtract credits for returns and shorts. Leave out beverages, paper, chemicals and smallwares.
4. Count ending inventory. Count everything on hand, ideally at the same time of day each period (after close or before the first delivery), and value it at current invoice prices.
5. Calculate COGS. Beginning + purchases − ending.
6. Divide by food sales and multiply by 100.

What does a worked example look like?

A 90-seat full-service restaurant, one week:

• Purchases, net of credits = $11,650 − $150 = $11,500
• COGS = $14,200 + $11,500 − $13,500 = $12,200
• Food cost % = $12,200 ÷ $38,400 × 100 = 31.8%

One point of food cost at this volume is $384 a week, about $19,968 a year. That's why a single point is worth chasing.

Illustrative example, not customer data.

What is a good food cost percentage?

There's no universal "good" number. Concept, menu mix, price point and how much you prep in-house all move it. Published reference points:

The NRA itself notes that its figures aren't meant as standards or goals for individual restaurants. A steakhouse and a pizza shop can both be well-run at very different percentages.

A better target: your theoretical food cost, meaning what food should have cost given what you sold and your recipes. If actual is close to theoretical, your kitchen is running to recipe. If actual is well above theoretical, you have variance to find. See theoretical vs actual food cost.

What are the most common mistakes in calculating food cost?

• Using purchases instead of COGS. "We spent $11,500 on food" isn't food cost. Inventory changes matter.
• Mismatched periods. Weekly sales against a monthly invoice total.
• Missing invoices. Food cost looks great this week and terrible next week.
• Mixing in beverages. Beer, wine and liquor belong in beverage cost, measured against beverage sales.
• Counting at different times. A count before a big delivery and the next one after it distorts both periods.
• Valuing inventory at old prices. The dollar value of the shelf should use current costs.
• Ignoring transfers and staff meals. Food moved to another location, or eaten by staff, should be recorded so it doesn't look like loss.

Should you calculate food cost weekly or monthly?

Weekly, if you can. A monthly number tells you what happened four weeks ago. A weekly number gives you time to fix ordering, portioning or a price before the month closes. Many operators count high-cost items like proteins and seafood weekly and do a full count monthly. Whichever you choose, keep the period identical across inventory, invoices and sales.

How do you lower food cost percentage?

Work on the levers in order of evidence:

1. Find the variance first. Compare actual and theoretical, item by item, with the variance calculator. Fix what's leaking before you cut anything guests notice.
2. Fix portioning. Scales on the line, portion cups, plating guides.
3. Re-cost and re-price. Check plate costs against current invoices and adjust menu prices where margin slipped.
4. Order to par. Over-ordering creates waste. Par-based orders reduce it.
5. Use yield tests. Know what you really get from each case. See the yield calculator.
6. Rotate and track expiry. Use what's closest to its date first.

How does Varastiq calculate food cost?

Varastiq fills in every line of the formula from systems you already use. Beginning and ending inventory come from counts in the Stiq app, valued at your latest prices. Purchases come from invoice capture. Sales come from Toast (read-only) or a supported item-level sales report. Because recipes are costed live, Varastiq also knows your theoretical food cost and flags variance during the count.

Frequently asked questions

What is the formula for food cost percentage?

Food cost percentage equals beginning inventory plus purchases minus ending inventory, divided by food sales, multiplied by 100.

What is a good food cost percentage for a restaurant?

It depends on the concept. The National Restaurant Association reported median food and non-alcoholic beverage costs of 32.0% of sales for full-service and 32.4% for limited-service restaurants in 2024. Your own theoretical food cost is a better target.

Is food cost percentage based on food sales or total sales?

Calculate food cost against food sales and beverage cost against beverage sales. Industry reports sometimes use total sales, so check the definition before comparing.

Do I include beverages in food cost?

No. Track beverage cost separately, against beverage sales.

How often should I calculate food cost?

Weekly is best for control. Monthly matches most accounting periods but gives you less time to act.

What is the difference between food cost and COGS?

COGS is the dollar value of food used in a period. Food cost percentage is COGS divided by food sales.

Why is my food cost percentage so different week to week?

The usual causes are invoices landing in the wrong week, counts taken at different times, and missed credits. Keep periods consistent and record every invoice in the week it's received.

Sources

• National Restaurant Association, "Restaurant operators kept food cost ratios in check in 2024," analysis of the 2025 Restaurant Operations Data Abstract. National Restaurant Association. Accessed October 20, 2026.
• Toast, "Benchmarking Restaurants: How to Calculate 8 Key Benchmarks." pos.toasttab.com/blog. Accessed October 20, 2026.

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