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MealMargin

Food cost percentage explained

4 min read · 2026-09-06

Short answer: Food cost percentage is the ingredient cost of one serving divided by its selling price, times 100. A serving with 3.60 of ingredients that sells for 12.00 has a food cost percentage of 30%.

The formula

Divide the ingredient cost of one serving by what one customer pays for it, before tax.

Food cost % = ingredient cost per serving ÷ selling price per serving × 100

How it relates to margin

Food cost % measures ingredients as a percentage of the selling price. Margin measures what remains after all the direct costs MealMargin includes. So direct cost % + margin = 100%. Food cost % and margin are not mirror images, because packaging and other direct costs sit between them.

What MealMargin includes

MealMargin shows two numbers: ingredient cost % (ingredients only) and total cost % (ingredients plus packaging and other per-meal costs). Use the second one when you sell takeaway or delivery.

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