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Menu GP calculator: gross profit on a dish after VAT, and the price that hits your target
Enter a dish's ingredient cost and menu price to see its gross profit after VAT, the price that reaches your target GP, and what a 10% cost rise does to it.
Gross profit on a dish is what is left of the price after the VAT and the ingredients. Most mistakes come from skipping the first of those. The calculator takes the VAT out, gives the GP as a percentage and in pounds, and tells you the menu price that reaches your target.
Free tool
Menu GP calculator: gross profit on a dish after VAT, and the menu price that hits your target
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The sum
Three steps, and every kitchen calculator can do them.
- Take out the VAT. Divide the menu price by 1.2. On £16.50 that leaves £13.75; the other £2.75 goes to HMRC.
- Take off the ingredients. £13.75 less £4.20 is £9.55. That is the gross profit on one portion.
- Divide by the price without VAT. £9.55 ÷ £13.75 is 69.5%.
To price a dish for a target, run it backwards. Divide the ingredient cost by one minus the target, then add the VAT: £4.20 ÷ 0.30 is £14.00, and £14.00 × 1.2 is £16.80.
| Sum | Result | |
|---|---|---|
| Menu price | £16.50 | |
| Price without VAT | £16.50 ÷ 1.2 | £13.75 |
| Gross profit a portion | £13.75 − £4.20 | £9.55 |
| GP | £9.55 ÷ £13.75 | 69.5% |
| Price for 70% GP | £4.20 ÷ 0.30 × 1.2 | £16.80 |
| GP worked on the menu price (wrong) | (£16.50 − £4.20) ÷ £16.50 | 74.5% |
The five-point mistake
The last row is on the result for a reason. Work GP on the menu price and this dish reads 74.5%. It is 69.5%. A menu costed that way looks five points healthier than it is, and the gap only shows at the year end, when the accounts say the kitchen made less than the costings promised.
If you are not VAT registered, the sum changes: there is no VAT to take out of the price, and you enter costs as you pay them. If you are registered, enter ingredient costs without any VAT you reclaim.
Most of what a restaurant or pub sells is standard-rated: food and drink eaten on the premises, and hot takeaway food. Cold takeaway food and drink is zero-rated unless it is of a type that is always standard-rated, such as crisps, sweets and bottled water, and the calculator has a setting for it. HMRC's VAT Notice 709/1 sets out the tests for what counts as hot; check a dish against it before you treat it as zero-rated.
Pounds, not just percentages
A percentage tells you whether a dish is priced right. Pounds tell you which dishes pay the rent. The calculator multiplies the profit on a portion by the portions you sell: at 60 a week the example dish brings in £573 of gross profit a week and £29,796 a year.
That is why a steak at 60% GP can be worth more to the venue than a soup at 80%. The steak might make £14 a portion and the soup £5. Chase the percentage alone and you end up pushing the soup.
List your dishes with the pounds a week each one makes. The top five are the ones to protect when costs move; the bottom five are the ones to re-price, re-portion or drop.
When the supplier's prices go up
The fourth line of the result re-runs the sum with ingredients 10% dearer. On the example, £4.20 becomes £4.62, GP falls from 69.5% to 66.4%, and the price needed to hold 70% goes from £16.80 to £18.48.
You have three ways to respond, and the calculator will test each one:
- Put the price up. Enter the new cost and read off the target price. A rise to £17.50 holds 68.3%.
- Change the portion or the recipe. Re-cost the plate with the change and enter the new cost.
- Leave it and accept the margin. Sometimes right for a signature dish; know what it costs. Three points of GP on 60 portions a week at £13.75 is about £25 a week.
Do this when the supplier's price list arrives, not at the next menu reprint.
What GP leaves out
Gross profit is before wages, rent, rates, energy and everything else. A 70% GP does not make a venue profitable if the rota costs too much for the covers it serves. Our rota cost calculator works out the weekly wage bill with employer National Insurance, pension and holiday pay and sets it against covers, and the no-show calculator puts a yearly figure on empty tables in the same gross-profit terms used here.
The ingredient cost is only as good as the recipe card behind it. Cost the plate as it is served: the garnish, the oil, the bread, the sauce, and the trim you throw away. A fillet that loses a fifth of its weight in trimming costs a quarter more per served portion than the invoice price suggests.
Overlyft can set up an AI assistant that handles bookings, rotas and enquiries for a manager to approve. It does not cost menus; this calculator and a set of recipe cards do that.
Where this comes from: Our own arithmetic, shown in full on the page and checked by hand; VAT at the standard rate of 20% on food eaten in and hot takeaway food (GOV.UK VAT rates and HMRC VAT Notice 709/1, catering and takeaway food, updated 8 June 2026, read 2026-10-01). The test record is in tests/covers/tools-check.txt.
AEO Lookup editorial team
We write practical guides for people who run small UK firms, and we check every fact against its source on the date shown. Read how we review, or tell us if something has changed.
