GP Calculator
Gross profit calculator for hospitality. Enter cost and selling price to see gross profit, GP % and markup %.
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Gross profit is selling price minus direct cost. GP % expresses that as a portion of the selling price. Hospitality often quotes GP % rather than margin.
What this calculator does
Works out gross profit in pounds, GP percentage and the equivalent markup for any single item, using the net cost and net selling price.
Who it is for
- Bar managers checking GP on draught, bottles and spirits.
- Kitchen teams verifying that a dish hits the site's GP target.
- Operators preparing a budget or a price review.
How to use it
- Enter the cost of the item, net of VAT.
- Enter the selling price, net of VAT.
- Compare the GP percentage against your site target for that category.
The formula
- Gross profit = Net selling price - Net cost
- GP% = (Gross profit / Net selling price) x 100
- Markup% = (Gross profit / Net cost) x 100
Worked example
A dish costs £2.85 to plate and sells for £11.50 including 20% VAT.
- Net selling price = £11.50 / 1.2 = £9.58
- Gross profit = £9.58 - £2.85 = £6.73
- GP% = £6.73 / £9.58 = 70.2%
£6.73 gross profit per sale at a 70.2% GP.
How to read your result
- GP targets differ by category. Wet and dry lines are normally budgeted separately because their cost structures are nothing alike.
- GP percentage tells you efficiency; cash GP tells you what actually lands in the bank.
- A GP figure calculated from recipes is theoretical. Your stocktake GP is the one that pays the rent.
What to do next
- Set a GP target per category rather than one blanket number for the whole menu.
- Where an item misses target, test a specification change before a price rise - customers notice price faster than they notice grams.
- Run the actual vs theoretical GP calculator after each stocktake to see whether the recipe GP is being achieved.
Common mistakes to avoid
- Using a VAT-inclusive selling price, which overstates GP by around six points at the 20% rate.
- Forgetting to include wastage or free-pour variance on drinks.
- Comparing your GP with someone else's without checking whether they include labour or packaging.
Assumptions and limitations
- Gross profit excludes labour, rent, utilities and every other overhead.
- Single-line calculation; blended GP across a menu needs sales volumes.
Dumb Bambi provides general business information, not accounting, tax or legal advice. Read our calculation methodology or tell us about a mistake.
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Keep going with these tools
- Food Cost Calculator - Food cost %, GP % and profit per dish.
- Cocktail Margin Calculator - Pour cost, profit per serve and margin % for multi-spirit cocktails.
- Markup Calculator - Calculate selling price from cost and markup %.
Frequently asked questions
Is GP % the same as margin %?+
Yes - they are the same calculation, just different names commonly used in different industries.
What GP do bars aim for?+
Wet GP targets are typically 70–75% on draught beer, 75–80% on wine and 80%+ on spirits.