Recipe costing for restaurants: what it is and how to do it

The sheet that shows what each dish costs and what it earns. We explain it and keep it current.

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Recipe costing, also called menu costing or plate costing, is the cost sheet for a dish: the list of every ingredient, with the exact quantity that goes into one portion and what each one costs. It tells you what it costs to serve that dish, how much margin it leaves at the current price and what you should charge for it. Without it, menu prices are guesswork.

Costing one dish is not hard: you weigh, write down and divide. The hard part is doing it for the whole menu, including trim and cooking loss, and keeping it current when purchase prices change. That is why many restaurants have recipe costs that are out of date and that nobody checks.

At Hostelella, recipe costs are prepared and maintained by our consulting team, together with you and your kitchen. We use them for what matters: reviewing prices, portions, purchasing and which dishes are worth highlighting on the menu. It all starts with a free assessment, with no lock-in and with the final say always yours.

How to cost a recipe step by step

Five steps, repeated the same way for every dish on the menu.

  • List every ingredient in one portion with its exact quantity, including oil, garnish, sauce, bread and decoration.
  • Write down the purchase price of each one before tax, in the same unit you weigh it in (kilo, liter or unit).
  • Apply the yield: divide the purchase price by the usable share. If you keep 800 g from 1 kg, the yield is 0.8 and the usable kilo costs the price ÷ 0.8.
  • Multiply the quantity by the true cost of each ingredient and add everything up: that is the cost per portion.
  • Take the menu price net of tax and calculate: gross margin = net price − cost per portion; food cost % = cost per portion ÷ net price × 100.

A worked example

A beef dish with made-up figures, just to show the arithmetic.

  • Beef loin bought at €24.00 per kg before tax. After trimming you keep 80%: the usable kilo costs 24.00 ÷ 0.80 = €30.00.
  • The portion uses 200 g trimmed: 0.2 × 30.00 = €6.00. Garnish and sauce add €1.10; oil, bread and decoration add €0.40.
  • Cost per portion: 6.00 + 1.10 + 0.40 = €7.50.
  • Menu price of €27.50 including 10% tax: 27.50 ÷ 1.10 = €25.00 net.
  • Gross margin: 25.00 − 7.50 = €17.50 per portion. Food cost: 7.50 ÷ 25.00 = 30%.

Common mistakes

Almost all of them make the dish look cheaper than it is.

  • Costing with purchase weight and forgetting trim and cooking loss. In the example, the beef would look like €4.80 instead of €6.00: a €1.20 error on every portion.
  • Using the menu price with tax included: food cost comes out lower than it really is.
  • Leaving out the small things: oil, bread, sauces, decoration or delivery packaging.
  • Costing the recipe once and never touching it when the supplier changes prices.
  • Writing one portion and serving another: without written weights and a scale on the pass, the sheet is worthless.

How we keep them current

A recipe cost is useful only while it reflects what you buy and what you serve.

  • We prepare them with your kitchen, weighing real portions and testing yields.
  • We review them when the price of a key ingredient changes or you switch suppliers.
  • We compare them with sales to see which dishes bring in the most money overall, not just the best percentage.
  • We bring the proposals (price, portion, recipe or removal) to the monthly review, and you decide.

Questions before starting

What is recipe costing?

Recipe costing is the detailed calculation of what a dish or drink costs to make: every ingredient, with quantities and prices, to get the cost per portion. That figure is used to set the selling price and to know the margin on each dish.

How do you set a menu price from the recipe cost?

Divide the cost per portion by your target food cost to get the price net of tax, then add tax where it applies. With a cost of €7.50 and a target of, say, 30%, that gives €25.00 net. It is a starting point: you still have to consider what your guests are willing to pay and what competitors charge.

What food cost percentage should a dish have?

There is no percentage that fits every case. It depends on the type of restaurant, the dish and your labour costs. The percentage can also mislead on its own: a dish with a high food cost can leave you more money per portion than one with a low food cost. Always look at the margin in money as well.

How do you calculate the yield of a product?

Weigh the product as purchased, then weigh it again trimmed and, if it loses weight in cooking, cooked. Yield is usable weight divided by purchase weight. To get the true cost, divide the purchase price by that yield.

How often should recipe costs be updated?

Whenever the price of a main ingredient changes noticeably, when you change supplier, recipe or portion, and at least with every menu change. The ingredients that weigh most on cost are worth watching continuously.

Does the Hostelella app cost recipes automatically?

Not today. Recipe costs are prepared and maintained by our consulting team with you. The app is the shared tool that brings together your invoices, delivery notes and purchases, which are the basis for keeping prices current.

Put numbers behind your menu

Request a free assessment and we will look at your recipe costs and prices with you.

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