What costs belong to the extra?
Start with the costs that change when a customer chooses the extra. These might include an additional ingredient, a separate pot or extra packaging. Do not charge the base recipe’s cost twice.
Our illustrative café dish costs £3.60 per sold portion and has a £12.00 customer price. An optional topping adds £0.45 to the portion cost and £1.80 to the customer price. Assume both price components carry the same 20% sales VAT solely for this arithmetic example; this does not classify any food item.
Costs exclude recoverable purchase VAT and include non-recoverable VAT. Assume the costs already include any appropriate allowance for unsold portions, so no further waste adjustment is made. The topping does not replace an ingredient, and the base dish’s price and cost remain unchanged.
All worked numbers were checked using Python 3. Calculations retain full precision, with money shown to pennies and percentages to two decimal places.
How much does the extra leave per sale?
Net sale means the customer payment before sales VAT. Gross profit is net sale minus the entered cost. GP margin expresses that profit as a percentage of net sale.
Additional net sale = extra customer price ÷ (1 + VAT percentage ÷ 100). Additional gross profit = additional net sale − additional cost.
For the topping, £1.80 ÷ 1.20 = £1.50 additional net sale. Subtract its £0.45 cost to get £1.05 additional gross profit. Its standalone GP margin is £1.05 ÷ £1.50 × 100 = 70.00%.
The extra therefore adds £1.05 against the entered costs, rather than the full £1.80 charged. That amount still has to cover any remaining expenses, including additional work or payment costs omitted from the cost figure. It is not net or take-home profit.
What happens to the complete dish’s margin?
Without the topping, the £12.00 dish produces £12.00 ÷ 1.20 = £10.00 net sale. Subtracting £3.60 cost gives £6.40 gross profit and a 64.00% GP margin.
With the topping, the customer price becomes £13.80 and the entered cost becomes £4.05. Net sale is £13.80 ÷ 1.20 = £11.50. Gross profit is £11.50 − £4.05 = £7.45, giving a 64.78% margin.
The difference in gross profit is £7.45 − £6.40 = £1.05, matching the separate topping calculation. Do not average the base dish’s 64.00% and the topping’s 70.00%: calculate the combined profit divided by the combined net sale.
Can an extra add GP pounds but reduce the margin?
Yes. Keep the topping cost at £0.45 but test a lower additional customer charge of £1.20, with the same assumed VAT treatment.
The extra now produces £1.00 net sale and £0.55 gross profit, a standalone margin of 55.00%. The complete order costs £4.05 and sells for £13.20, producing £11.00 net sale and £6.95 gross profit. Its margin is 63.18%.
That is more GP pounds than the base dish’s £6.40, but a lower margin than its 64.00%. Neither measure alone settles the decision. Consider the extra work, capacity and customer response alongside both figures.
If the specific objective were to retain this example’s 64.00% margin, the extra price would be £0.45 ÷ (1 − 64 ÷ 100) × 1.20 = £1.50. This is an illustrative constraint, not a recommended target or market price.
How can you test extras in the calculator?
Open GP Calculator UK at / and select Check my GP. Enter cost 3.60, customer price 12.00 and assumed VAT 20 for the base dish. Then enter cost 4.05 and price 13.80, keeping VAT at 20, for the dish with its topping. Compare GP pounds and margin.
To isolate the topping, enter cost 0.45 and customer price 1.80 with VAT 20. Read /#guide for input help and /methodology/ for calculation assumptions and rounding.
Record how many extras actually sell. If 30 out of 100 otherwise unchanged dish orders include the £1.80 topping, the extras add 30 × £1.05 = £31.50 gross profit. Total GP becomes £671.50 instead of £640.00. This holds base sales and unit costs constant; it does not predict uptake or additional customers.
What should you check before adding it to the menu?
Confirm the serving measure and any extra packaging. If preparing toppings creates unsold stock, reflect that in the cost per sold topping without adding the same allowance twice. Unsold-portion waste is different from cooking yield loss.
Check whether the extra replaces something already included. For a substitution, use the net cost change after removing the displaced ingredient’s cost. Also consider whether the extra slows service or substitutes for another profitable purchase.
Replace the assumed VAT input with the treatment applicable to the actual sale. HMRC explains catering and takeaway distinctions at https://www.gov.uk/guidance/catering-takeaway-food-and-vat-notice-7091 . The combined-price shortcut above assumes the same VAT rate throughout; do not apply it unchanged where the relevant treatment differs.
Purchase VAT recovery has conditions and exceptions: https://www.gov.uk/charge-reclaim-record-vat/reclaim-vat-business-expenses . Use costs excluding recoverable VAT and including VAT you cannot recover. This guide explains pricing arithmetic and does not provide personalised tax advice.
Sources
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Use the free GP calculator to check selling prices, compare margins and save menu items on your device. Gross profit is before remaining business expenses.
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