Worked example
A €18 dish with a €5.20 food cost
- Selling price incl. VAT
- €18.00
- VAT applied to this price
- 10.00%
- Selling price excl. VAT
- €16.36
- Food cost per portion excl. VAT
- €5.20
- Gross margin
- €11.16
- Margin on sales
- 68.22%
- Markup on cost
- 214.69%
Your target price incl. VATTarget 70.00%
€19.07
At 10% VAT, the net price is €16.36 and gross margin is €11.16. Margin on sales is 68.22%; markup on cost is 214.69%. To reach a 70% margin on net sales with the same cost, the first price rounded to cents that meets the target is €19.07 including VAT.
Theoretical margin in euros, before labour and overheads. Excludes discounts, commissions and extras.