A menu price has to clear three numbers: the floor set by the plate cost, the cash each cover must leave to pay for the room, and the ceiling the local market will accept. A sirloin with €11.50 of meat on it needs €38 net to hit a 30% food cost, but if the bistro down the road sells it for €30, the formula's answer is useless. Most pricing mistakes come from looking at only one of the three.
This article starts where how to calculate food cost per dish ends: you have a costed recipe card and need a number to print. No card yet? The free food cost calculator gives the plate cost for one dish. All prices below are net, without VAT or sales tax, so the arithmetic works in any country; add your own rate at the very end, after the price is settled.
Three numbers a price has to clear
The floor is cost per portion divided by your target food cost. At a 30% target, a dish with €4.20 of ingredients needs at least €14 net. Below it, the dish earns less per euro of sales than the rest of the menu is planned to.
The cash per cover comes from the overheads, not from the dish. Add up a month of everything that is not ingredients: wages with employer contributions, rent, energy, insurance, card fees, the accountant. Divide by the covers you serve. A bistro with €36,000 of such costs and 3,000 covers a month needs €12 of contribution per guest before it makes a cent. If the average guest spends €28 net and food cost runs at 30%, each cover leaves €19.60. That works. At €20 average spend it leaves €14, and two slow weeks wipe out the profit.
The ceiling is what guests compare you with. Check five or six competitors within walking distance, same type of venue, and note the net price of comparable dishes. The ceiling is soft: a better product, a better room or a dish nobody else makes moves it. It still exists.
Cost-plus, cash margin or the market: which one leads
Pure cost-plus pricing is the worst of the three when it is used alone. Multiplying every plate cost by 3.33 overprices expensive proteins and underprices cheap dishes, because it assumes the guest pays for your ingredients. The guest pays for the dish.
Pricing by cash margin fixes half of that. A steak at 38% food cost that leaves €18.50 is a better sale than a risotto at 17% that leaves €12.40, and percentage alone would tell you the opposite. Market pricing alone fails the other way: it copies a competitor whose costs and rent you do not know.
Start from the floor, check the cash, cap at the market. When the floor sits above the ceiling, the problem is the recipe or the portion, not the price.
A worked category: five mains
Plate costs are illustrative. The "formula" column is cost ÷ 0.30, the price a flat 30% target would give.
| Main | Plate cost | Formula price | Menu price (net) | Food cost | Cash per plate |
|---|---|---|---|---|---|
| Mushroom risotto | €2.60 | €8.67 | €15.00 | 17.3% | €12.40 |
| Burger | €3.90 | €13.00 | €15.50 | 25.2% | €11.60 |
| Chicken supreme | €4.20 | €14.00 | €17.00 | 24.7% | €12.80 |
| Hake with clams | €6.80 | €22.67 | €22.00 | 30.9% | €15.20 |
| Sirloin, 250 g | €11.50 | €38.33 | €30.00 | 38.3% | €18.50 |
The formula would put the risotto at €8.67 and give away €6.33 a plate that the market was willing to pay. It would put the sirloin at €38.33, where a casual bistro stops selling it. The final prices run from 17% to 38%, and every dish leaves at least €11.60.
The burger has the thinnest cash margin and will probably sell the most. If it does, it sets the average. Which dish deserves the best spot on the page is a question for menu engineering, which crosses this cash column with sales counts.
One check on the spread: the dearest main here costs twice the cheapest. Stretch a category from €9 to €40 and the guest reads two different restaurants on one page, so the top dish either stops selling or makes everything else look cheap.
When labour, not ingredients, is the cost
Some dishes cost little on the recipe card and a lot in the kitchen. Hand-rolled pasta, a terrine, croissants laminated in-house. If a plate takes 6 minutes of a cook whose wage with employer contributions comes to €18 an hour, that is €1.80 of labour on top of the ingredients. A €2.60 risotto that takes 12 minutes of stirring at the pass is really a €6.20 dish.
Food cost pricing ignores this. Kitchens that make most things from scratch need either higher prices on the labour-heavy dishes or a lower food cost target overall. The number that holds both together is prime cost, food plus labour as a share of sales. It does not change the pricing of a kitchen that buys most items ready-made.
When to raise prices, and by how much
Raise when costs move, not when the calendar says so. A workable trigger from the recipe card side: re-cost a dish when an ingredient that makes up more than 10% of its cost moves by more than 5%.
Wages move once a year and hit every dish at the same time. The UK National Living Wage went from £12.21 to £12.71 on 1 April 2026, a 4.1% rise. Ireland's national minimum wage went from €13.50 to €14.15 on 1 January 2026, up 4.8%.
To keep the same cash profit, prices have to rise by the cost increase in euros divided by current sales. On a menu where food runs at 30% of sales and labour at 32%:
- food prices up 8% → 0.30 × 8% = 2.4% of sales;
- wages up 4.1% → 0.32 × 4.1% = 1.3% of sales.
Together, a 3.7% price increase just to stand still. This overstates the wage effect if only part of the team is on the legal minimum, and understates it if raising the bottom forces you to raise the people above to keep the gaps. Spreading the increase unevenly is normal: a euro on the steak is less visible than 50 cents on a €4 side. The piece on menu price psychology covers how large a single step can be before guests notice.
Testing a new price
A price rise pays for itself unless unit sales fall by more than a threshold you can calculate. The allowed drop is the increase divided by the contribution margin plus the increase. With a 30% food cost the contribution margin is 70%, so a 5% rise survives a fall in units of up to 5 ÷ 75 = 6.7%. A 10% rise survives up to 12.5%.
Measure units sold per 100 covers, not turnover: turnover goes up after a rise even when the dish is dying. Give it four weeks and compare with the same weeks before the change, not with last month, if you trade on tourism or weather. This test fails on a dish that sells five times a week. At that volume, noise is larger than any effect, and the decision is made on margin and kitchen time alone.
On a printed menu every test is a reprint, so most restaurants run none and set prices once a year by feel. On a digital menu a price changes the same day and changes back just as fast.
What the law says about the price on the menu
Rules on displayed prices differ by market, and they decide what the number on the menu must include.
- UK. Prices to consumers include VAT. Since 6 April 2025 the Digital Markets, Competition and Consumers Act 2024 bans drip pricing, and the CMA treats a mandatory service or cover charge as part of the headline price. An optional service charge does not have to be included.
- Ireland. The Retail Prices (Food in Catering Establishments) Display Order 1984 requires a price list at or near the entrance, stating any service charge, cover charge or minimum charge. The CCPC enforces it and issued compliance notices to bars and cafés in 2025.
- US. Menu prices are shown before sales tax. In California, restaurants may keep a mandatory service fee only if it is shown clearly and conspicuously wherever prices appear, under the exemption added by SB 1524 in 2024.
A digital menu has to follow the same rules as the printed one.
From one dish to the whole menu
The calculator handles one dish at a time. With 40 dishes and ingredients shared between them, a price change on butter or cod touches a dozen recipe cards. In the WMenu panel, the ingredient library, recipe cards and menu prices sit in one place: update the price of an ingredient and every dish that uses it is recosted, and the price at your target food cost goes to the menu in one click. That is the Standard plan, €29 a month (pricing).
Frequently asked questions
Should I price every dish at the same food cost percentage?
No. Use the target as a floor, then set the price by cash margin and by what comparable venues charge. Expensive proteins end up above the target, cheap dishes below it.
How often should menu prices be reviewed?
Every quarter, and at each menu change. Between reviews, re-cost a dish when one of its main ingredients moves by more than 5%, and the whole menu when wages change.
Is it better to raise all prices at once or a few at a time?
A few at a time, spread over the dishes where the rise is least visible. A single across-the-board increase is easier to notice and easier to compare with last year's menu.
