QaiMa

How to price a menu in the UAE (with a calculator)

Divide the ingredient cost of a portion by your target food cost percentage to get the price before VAT, then multiply by 1.05 to add UAE VAT and round up to a price you would print. A dish that costs AED 12 to make, at a 30% food cost, sells for AED 40 before VAT and AED 42 on the menu.

Menu price calculator (AED, VAT included)

Print on the menu42
Price before VAT
40 AED
VAT included (5%)
2 AED
Gross profit per plate
28 AED
Actual food cost after rounding
30%

12 ÷ 30% = 40 before VAT → × 1.05 = 42 → rounded up to 42

The food cost formula

Menu price before VAT = cost per portion ÷ target food cost %

Take a mixed grill. The lamb, chicken and kofta cost AED 21, the bread, garlic sauce, pickles and salad AED 4, and the charcoal and oil about AED 1: AED 26 per plate. At a 32% food cost target, 26 ÷ 0.32 = AED 81.25 before VAT. Add VAT (× 1.05) and it is AED 85.31, so it goes on the menu at 86, or 89 if you round to a price that ends the way the rest of your menu does.

What food cost percentage to aim for

Many restaurants work to a food cost of roughly 28 to 35%, but a single percentage for the whole menu is too blunt. Different parts of a menu carry very different costs:

Menu itemFood cost is usuallyWhy
Coffee, tea, karakLowCheap ingredients, value is in preparation
Mezze and saladsLow to moderateVegetables, pulses and dairy
Grills and mainsModerateMeat is the main cost
Fresh seafoodHigherMarket price, and trimming loss
DessertsLow to moderateUnless built on imported chocolate or saffron

A menu with a high-cost seafood section can still hit its overall target if the mezze and drinks sell well. That is why step one of designing a menu is sorting dishes by how much they sell as well as what they cost.

Cost the dish properly first

The formula is only as good as the cost you put in. The usual gaps:

VAT on menu prices in the UAE

UAE VAT is 5%, and the Federal Tax Authority requires prices shown to consumers to include it. Displaying prices without VAT can bring a fine of AED 15,000. So the price on your menu is always the VAT-inclusive one, and the maths runs:

Add a line to the footer saying prices are in dirhams and include VAT, in English and Arabic. QaiMa can print that note on every template.

When the percentage misleads you

Food cost percentage tells you how efficient a dish is, not how much money it makes. Compare a hummus at AED 28 with a 20% cost (AED 21.33 profit on AED 26.67 before VAT) against a grilled hammour at AED 95 with a 38% cost (about AED 56 profit). The hummus has the better percentage, the hammour puts more than twice as much in the till per plate. Price for profit per plate as well as percentage, and promote the dishes that earn the most, not the ones with the prettiest ratio.

Show the prices well

Once the numbers are right, how they appear on the menu matters too. Leave the currency sign off each line and avoid a column of prices guests can read down to find the cheapest. The menu design guide covers price formatting, and when a price changes, the menu maker updates the printed menu and the QR menu together.

Menu pricing questions

What is the formula for menu pricing?

Menu price before VAT = ingredient cost per portion ÷ target food cost percentage. In the UAE, multiply the result by 1.05 to add 5% VAT, then round up to a price you would print. A dish costing AED 12 at a 30% target is 12 ÷ 0.30 = 40, and 40 × 1.05 = 42 on the menu.

What food cost percentage should a restaurant aim for?

Many restaurants work to roughly 28 to 35% for food. Drinks such as coffee, tea and fresh juice usually run a lower percentage, and premium proteins like fresh seafood often run higher. The right figure depends on your rent, staffing and concept, so treat these as a starting point rather than a rule.

Do menu prices in the UAE have to include VAT?

Yes. The Federal Tax Authority requires prices displayed to consumers to include VAT, and displaying prices without it can bring a fine of AED 15,000. Price every dish VAT-inclusive and note on the menu that prices include 5% VAT.

How do I work out the VAT inside a menu price?

Multiply the menu price by 5 and divide by 105. On a dish printed at AED 42, the VAT is 42 × 5 ÷ 105 = AED 2, and the price before VAT is AED 40.

Should delivery app prices be the same as the menu?

Many restaurants price higher on delivery apps to cover the aggregator's commission and packaging. Work the delivery price out from the same food cost plus commission and packaging per order, and check your contract with the app for what it allows.

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