Costs02/15/2026
F&B Cost Structure
Know where your money goes before you start
25-35% COGS (Food Cost)(of revenue)20-30% Labor(of revenue)10-20% Rent(of revenue)5-15% Net Profit(with good management)
Typical Cost Breakdown
Raw Materials (Food Cost)25 - 35%Largest expense — control with standardized recipes
Labor20 - 30%Wages + Social Insurance + meal & shift allowances
Rent10 - 20%Including management fees and VAT on lease
Marketing3 - 8%Online ads + promotions + influencers
Utilities (electricity, water, gas...)5 - 10%Varies by season and business model
Depreciation & Misc.3 - 5%Equipment wear, breakage, and damage
Hidden Costs Often Overlooked
Social Insurance (BHXH + BHYT)21.5%On base salary — employer pays 21.5%
Ingredient Spoilage3 - 8%Wilted produce, spoiled meat, daily breakage
Delivery App Fees20 - 30%GrabFood/ShopeeFood commission per order
VAT on Lease8 - 10%Many lease contracts exclude VAT
Equipment Maintenance1 - 3%Espresso machines, refrigerators breaking unexpectedly
Taxes & Accounting1 - 2%Lump-sum tax / VAT + accounting service fees
Golden rule: COGS + Labor (Prime Cost) should not exceed 60-65% of revenue. If it does, profitability becomes nearly impossible. Real-world costs typically run 20-30% higher than projections due to the hidden costs listed above.
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