What is the difference between markup and margin?

Markup is profit divided by cost; margin is profit divided by price. A 50% markup is a 33% margin.

How do I calculate food cost percentage?

Divide the cost of the ingredients by the selling price and multiply by 100.

How do I calculate how much to buy after trimming?

Divide the amount you need by the usable yield. For 2 lb of asparagus at 55% yield, buy 2 ÷ 0.55 ≈ 3.6 lb.

Food cost %, markup and margin explained (with formulas)

Markup and margin are not the same number, and mixing them up is one of the quietest ways chefs lose money. Here are the formulas in one place.

The formulas

Food cost %	food cost ÷ price
Markup	profit ÷ total cost
Profit margin	profit ÷ price
Labor %	labor ÷ price
Break-even price	food + labor + direct costs + overhead

Markup vs margin

Markup	Margin
25%	20%
43%	30%
50%	33%
100%	50%

If you want a 30% margin, adding 30% to your cost is not enough: you need a 43% markup. To price for a margin directly: price = cost ÷ (1 − margin).

Yield: why your shopping list is always short

Recipes list what you serve; stores sell what you trim. Amount to buy = amount needed ÷ usable yield. Asparagus keeps about 55% after trimming, so 2 lb trimmed needs about 3.6 lb. A skin-on salmon fillet keeps about 88%. Add a small waste buffer and round up to whole packs.

Seasoning doesn’t scale in a straight line

Doubling a recipe rarely needs double the salt and spices. Scale seasonings more gently than the main ingredients and taste as you go.

Run your own numbers

ChefCents does this math for you: menu, shopping list with yield and whole packs, every cost, and a price for your margin or service fee. Free during beta, on your phone.

Start a free estimate

Questions chefs ask

What is the difference between markup and margin?: Markup is profit divided by cost; margin is profit divided by price. A 50% markup is a 33% margin.
How do I calculate food cost percentage?: Divide the cost of the ingredients by the selling price and multiply by 100.
How do I calculate how much to buy after trimming?: Divide the amount you need by the usable yield. For 2 lb of asparagus at 55% yield, buy 2 ÷ 0.55 ≈ 3.6 lb.