Restaurant gross profit and GP %: formula and calculator
By mise · Updated September 29, 2026
Quick answer: GP % = (net selling price − cost price) ÷ net selling price × 100, where net price excludes VAT (divide the menu price by 1.2 at 20% VAT). UK restaurants usually target 65–72% GP on food; pubs 60–70% on drinks. To price for a target GP: price inc. VAT = cost ÷ (1 − target GP) × 1.2.
In the UK the kitchen talks in GP, not food cost. The maths is the same — GP is 100% minus food cost — but VAT catches people out.
The formula (with VAT)
Typical GP targets
| Category | Target GP |
|---|---|
| Food (restaurant) | 65–72% |
| Food (pub) | 60–65% |
| Draught beer and cider | 55–65% |
| Wine | 65–70% |
| Spirits and soft drinks | 70–80% |
Menu GP vs actual GP
The GP on the recipe card is the theoretical GP. The actual GP comes from the stock take: cost of sales = opening stock + purchases − closing stock. The gap is wastage, over-portioning and theft — see actual vs theoretical.
mise gives you the actual side from your stock takes and invoices.
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Frequently asked questions
How do you calculate GP on food?
Remove VAT from the selling price, subtract the ingredient cost, and divide by the net price.
What is a good GP for a restaurant in the UK?
Around 65–72% on food; drinks vary from about 55% on draught beer to 80% on spirits and soft drinks.
Is GP the same as margin?
GP % on the net selling price is the gross margin. Markup is different: it divides by cost, not by price.