GP calculator: gross profit and food cost per dish

Gross profit, or GP, is the first number to know about any dish: of what the customer pays, how much is left once the VAT and the ingredients are taken out? Put in one dish below and the calculator works out its GP, its food cost and the menu price that would hit your target.

Gross profit on one dish

Menu price, as the customer pays it£What the ingredients cost you without VAT, for one portion£

Which VAT rate does it carry?

Your target GP%

Price without VAT: £12.08
VAT you pass to HMRC: £2.42
Gross profit: £7.88
GP percentage: 65.2% of the price without VAT
Food cost: 34.8% of the price without VAT
Menu price for your target: £16.80 Raise the price to at least this to reach your target.

Gross profit here is the price without VAT less the cost of the ingredients. It does not include staff, rent, energy, card fees or delivery commission, which come out of the gross profit. VAT rates from HMRC’s VAT Notice 709/1 (checked 20 October 2026); for a borderline item, use our takeaway VAT calculator or ask your accountant.

How it works it out

Take the VAT out first. Food eaten on your premises is 20%, and so is hot takeaway; most cold takeaway food is 0% (VAT Notice 709/1). At 20%, the VAT inside a menu price is one sixth of it. That part goes to HMRC, so gross profit is worked on the price without it.
Gross profit is the price without VAT, less the ingredient cost for one portion. Use the ingredient cost without VAT: if you are VAT registered, you reclaim any VAT you paid on them.
GP percentage is the gross profit divided by the price without VAT. Food cost percentage is the ingredient cost divided by the same price. The two always add up to 100%.
The price for your target is the ingredient cost divided by one minus your target GP, with VAT added back on top.

What it leaves out

Gross profit only takes off the ingredients. Staff, rent, energy, card fees and delivery commission all come out of it afterwards, so a dish needs a GP well above zero to pay its way. If you sell through delivery apps, our delivery app commission calculator shows how much of an order the app keeps.

The ingredient cost is only as good as the recipe behind it. Weigh a portion as the kitchen really serves it, include the garnish and the sauce, and update the cost when a supplier’s price changes. In Yumee POS, stock and recipe costing is an add-on that works this out from your recipes.

If you are not sure which VAT rate a dish carries, the takeaway VAT calculator walks through HMRC’s tests.

Common questions

Should gross profit be worked out on the price with or without VAT?

Without. If the dish carries 20% VAT, one sixth of what the customer pays is VAT that you pass to HMRC, so it was never yours. Working GP on the VAT-inclusive price makes every dish look more profitable than it is.

What is the difference between GP percentage and food cost percentage?

They are two sides of the same price. Food cost percentage is the ingredient cost divided by the price without VAT; GP percentage is what is left. A dish with a 30% food cost has a 70% GP.

How do I find the menu price for a target GP?

Divide the ingredient cost by one minus the target, then add VAT back. For a £4 ingredient cost and a 75% target, that is £4 divided by 0.25, which is £16 without VAT, or £19.20 with 20% VAT.

Does gross profit include staff wages and rent?

No. Gross profit only takes off the ingredients. Wages, rent, energy, card fees and delivery commission all come out of the gross profit afterwards, which is why it has to be well above zero for a dish to pay its way.

Sources

HMRC, Catering, takeaway food (VAT Notice 709/1), last updated 8 June 2026: sections 2.1–2.2 and 3.1–3.2, which food is 20% and which is 0%.
HMRC, VAT guide (VAT Notice 700): reclaiming the VAT you pay on your business purchases.

This calculator is general information, not financial or tax advice. For your own prices, ask your accountant.