How do I cost a recipe? A step-by-step guide for professional kitchens
To cost a recipe, list every ingredient with its purchase price and pack size, work out the cost of the quantity actually used (adjusted for yield), add a wastage allowance, sum the ingredient costs for a batch cost, then divide by the number of portions. Compare the per-portion cost to your ex-VAT selling price to get your gross profit margin. Here's the full process.
Step 1: List every ingredient — including the small stuff
Oil, seasoning, garnishes and sauces are where recipe costings quietly go wrong. A "2% sundries allowance" is acceptable, but costing them properly is better. If a dish has a marinade or a sub-recipe (a stock, a dressing), cost that recipe first and use its per-unit cost as an ingredient.
Step 2: Convert pack price to unit cost
Divide the purchase price by the pack size to get a cost per gram, ml or unit. A 5kg case of chicken thighs at €38.50 is €0.0077/g — so a 180g portion costs €1.39.
Step 3: Adjust for yield
Raw weights lie. Trimming, peeling and cooking loss mean the usable amount is less than what you bought. If chicken thighs lose 15% in trimming and cooking, the real cost of a 180g served portion is €1.39 ÷ 0.85 = €1.63.
Step 4: Add a wastage allowance
Even well-run kitchens waste 5–10% of fresh produce and proteins through spoilage, over-prep and plate waste. Build it into the costing rather than discovering it in the monthly stocktake.
Step 5: Total, divide, compare
Sum the adjusted ingredient costs for the batch, divide by portions, and compare with your selling price excluding VAT:
Most restaurants target 65–70% GP on food (see: What is a good gross profit margin for a restaurant?).
Step 6: Keep it up to date — this is the hard part
A recipe costing is a snapshot. Supplier prices change weekly, and a costing done in January can be badly wrong by summer. Options:
- Spreadsheet: fine for a short menu. Our free recipe costing Excel template has the formulas above built in, plus allergen tracking. The discipline is re-entering prices every time your suppliers change them.
- Software: Prepsheets links recipes to a managed database of supplier ingredient prices, so when a price changes, every affected recipe and its margin updates automatically — across all your sites. Customers report an average 4% margin increase and an hour a day saved on recipe admin.