Every recipe, saved
Cost each dish from your own stock items, and come back to it.
Free menu margin & GP calculator, with VAT
Work out the gross profit (GP) and food cost of any dish or drink after VAT, and what to charge for the margin you want.
Free, no sign-upUK VAT ratesNothing leaves your browser
Flat white
£3.20
- Espresso 18 g
- £0.22
- Milk 200 ml
- £0.30
- Cup and lid 1
- £0.08
- VAT in the price (20%)
- £0.53
- You keep
- £2.0778% margin
- Food cost
- 22.5%
- Charge for 70%£2.40, rounded up to 10p
- £2.40
How to calculate menu margin Four lines of arithmetic.
Worked through for a £3.20 flat white with £0.60 of ingredients, at a café that is VAT-registered and prices with VAT included.
Take the VAT out of the price
If you are VAT-registered, part of every price belongs to HMRC. At 20% it is one sixth of a VAT-inclusive price.
£3.20 × 20 ÷ 120 = £0.53
Subtract the ingredients
What is left after VAT, less the cost of everything in one portion, is what the dish earns you.
£2.67 − £0.60 = £2.07
Divide by the price after VAT
That is your margin as a percentage. Food cost is the rest: 22.5% here.
£2.07 ÷ £2.67 = 77.5%
Work backwards to a price
For a 70% margin, divide the ingredient cost by what is left of each pound, then put the VAT back on.
£0.60 ÷ (1 − 70%) = £2.00, + 20% VAT = £2.40
- VAT
- £0.53
- Ingredients
- £0.60
- You keep
- £2.07
Ignore the VAT and it looks like you keep £2.60, a margin of 81.3%. That is only true if you are not VAT-registered.
Every dish, not just one. Free in DUMA.
Costs that keep up
Receiving a delivery updates what each ingredient costs, so the margin follows your suppliers.
Every size and option
A large latte or a swap to oat milk changes the cost, exactly as the till sells it.
Your whole menu, ranked
Menu engineering sorts dishes by popularity and margin, with what to do about each.
Questions about menu margin
What is GP on food, and how do I work it out?
GP is gross profit: what a dish leaves you after its ingredients, usually as a percentage of the price after VAT. It is the margin this calculator shows. A £3.20 flat white with £0.60 of ingredients at 20% VAT leaves £2.07, a 77.5% GP.
What GP should a café or restaurant aim for?
There is no single right figure. Many kitchens aim for a GP of around 65–75% on food, the other side of a 25–35% food cost, and drinks often run higher. Set a target for each part of the menu and check every dish against it, because one popular item below target can cost more than the rest earn.
How do I set a menu price from food cost?
Divide the ingredient cost by what is left of each pound at your target margin, then add VAT if your prices include it. £0.60 at 70% is £0.60 ÷ 0.3 = £2.00, or £2.40 with 20% VAT. The calculator does this and rounds up to the next 10p.
How do I calculate the margin on a menu item?
Take VAT out of the price if you are VAT-registered, then subtract the cost of the ingredients in one portion. Margin percentage is that amount divided by the price after VAT. For a £3.20 flat white with 60p of ingredients at 20% VAT, that is £2.07, or about 77.5%.
What is food cost percentage?
Ingredient cost as a share of what you keep from the price after VAT. It is the other side of margin: a 77.5% margin is a 22.5% food cost. The right figure depends on your menu and your prices, so watch it per dish.
Should I include VAT when I work out margin?
Only take it out if you are VAT-registered. The VAT in your price belongs to HMRC, so comparing ingredient cost with the full price overstates your margin. If you are not registered, there is no VAT to take out.
Which VAT rate applies to my food?
It depends on the item and how it is sold: hot food and drinks, eating in and some cold takeaway items are treated differently. The calculator lets you pick 20%, 5% or 0% per item; check HMRC’s guidance or ask your accountant which one applies.
Is this calculator the same maths DUMA uses?
Yes. It runs the same costing function as DUMA’s recipe costing, so a margin here matches the one DUMA shows on a recipe, to the penny. Nothing you type here is sent anywhere.
This calculator does one dish.DUMA does your whole menu.
Join DUMA for free and cost every dish from your own stock, with the same VAT sums as this page — saved, and kept up to date as your supplier prices change. No card needed.