How to Price Menu Items for Deliveroo and Uber Eats in the UK (Without Losing Your Margin to Commission)

Short answer: work backwards from what you actually keep. On a standard-rated hot food order, a VAT-registered UK restaurant keeps roughly menu price × (1 ÷ 1.2 − commission %). At 30% commission that's about 53p of every £1. So to hold a 30% food cost against your net takings, you need to price at roughly 6.25× your ingredient-plus-packaging cost — not the 3.3× you might use for dine-in.

That single piece of arithmetic is why so many delivery menus quietly lose money. Below is the full method, plus the levers that make delivery pricing workable rather than punishing.

Step 1: Find out exactly what you're paying

Before you touch prices, pull your actual contract terms and a recent statement. You need:

• Commission rate — varies by platform, city, and whether you use platform couriers, your own drivers, or collection-only. Self-delivery and pickup orders are typically charged at a much lower rate than full marketplace delivery.
• Whether commission is calculated on the VAT-inclusive subtotal — usually it is. Check.
• VAT on the commission itself — charged on top, but reclaimable if you're VAT-registered.
• Promotion and marketing costs — restaurant-funded offers (percentage-off, free item, delivery fee subsidies) and in-app ads come out of your margin after commission. Budget for them as a line, not a surprise.
• Refunds and adjustments — missing items, cold food, and cancelled orders get deducted. If you're seeing regular deductions, build an allowance in.

Never price off a rate you half-remember from a sales call.

Step 2: Decide the VAT status of each item

This is the biggest lever most operators ignore.

• Hot takeaway food and drink is standard-rated at 20%.
• Cold food taken away (sandwiches, wraps, salads, most cakes, cold drinks that aren't standard-rated) is generally zero-rated.
• If your turnover is below the VAT registration threshold, you aren't charging VAT at all — your maths is materially better, and your pricing should reflect that rather than blindly copying a VAT-registered competitor.

For a VAT-registered business selling hot food, VAT takes 16.67% of the menu price before commission is even applied. Two orders at the same price can have wildly different margins purely on VAT status.

Step 3: Cost the dish properly (including the bits people skip)

Your delivery food cost is not your dine-in food cost. Include:

• Ingredients at yield, not purchase weight. If you buy a 2.4kg chicken and use 1.6kg of cooked meat, your effective cost per usable kilo is far higher than the invoice price.
• Packaging. Container, lid, bag, sauce pots, cutlery, napkin, sticker. This is often 30–80p a dish and it's pure delivery-only cost.
• Sauces, garnishes, oil, seasoning. Small per-portion values that add up to real percentage points.
• Waste and comp allowance. If you remake a percentage of orders, that cost belongs in the dish.

Call this combined number F — your true landed cost per portion.

Step 4: Apply the formula

VAT-registered, standard-rated (hot) food:

```

Menu price = F ÷ [ target food cost % × (0.8333 − commission %) ]

```

Zero-rated food, or not VAT-registered:

```

Menu price = F ÷ [ target food cost % × (1 − commission %) ]

```

Worked example

Burger with fries: ingredients £2.00, packaging £0.50 → F = £2.50. Target food cost 30%. Commission 30%. VAT-registered, hot food.

• Net kept per £1 = 0.8333 − 0.30 = 0.5333
• Menu price = 2.50 ÷ (0.30 × 0.5333) = £15.63

For comparison, the same burger dine-in at 30% food cost prices at £10.00. That's a 56% uplift required just to stand still.

Multipliers at a glance (VAT-registered hot food, 30% target food cost)

Zero-rated or non-VAT-registered at 30% commission: roughly 4.8×.

Step 5: Reality-check against the market — then adjust the dish, not just the price

A £15.63 burger may simply not sell in your postcode. When the number doesn't fit the market, you have three honest options:

1. Accept a lower target margin on that item and make it up elsewhere. Track contribution in pounds, not just percentages — a £4.00 contribution on a £12 item beats a £3.00 contribution on a £9 item with a "better" percentage.
2. Re-engineer the dish. Trim the protein by 20g, swap the packaging, drop the third sauce pot, standardise portions so nobody over-scoops. Cutting F by 40p at a 6.25× multiplier saves £2.50 on the price you need.
3. Change the mix. Delivery makes its money on bundles and add-ons. Sides, dips, soft drinks and desserts often carry the lowest cost percentages on the menu. Build meal deals that raise average order value while improving blended margin.

Step 6: Set delivery prices separately from your in-house menu

Most UK operators run higher prices on the apps than in the restaurant or on their own ordering site. Check your current platform agreement for any price-parity clauses, then set delivery prices deliberately rather than uploading your dine-in menu wholesale.

Also worth doing:

• Trim the delivery menu. Fewer, better-travelling dishes mean less waste, faster tickets and fewer refunds.
• Push collection and direct ordering. Lower commission on those channels is the cleanest margin win available.
• Build a promo allowance into the target. If you plan to run offers, target 26–28% food cost rather than 30% so a discount doesn't tip an item into loss.
• Set a minimum order value high enough that small baskets don't drag your average down.

Step 7: Recost every 8–12 weeks

Ingredient prices move, packaging prices move, and commission tiers change when a contract is renewed — and a promotion you agreed to months ago may still be running against every order.

Put a recurring reminder in every 8–12 weeks and re-run the numbers from Step 4 on your best-selling delivery items: current dish cost, current commission rate, VAT status, target food cost. Anything that has drifted past your target gets repriced, reworked, or taken off the delivery menu.

That is the whole job — know the real deduction, cost the dish honestly, price the delivery menu deliberately rather than uploading your dine-in prices, and check it again before the margin quietly disappears.

Want the maths done for you? Price any dish in seconds with the free food cost calculator, or get a ready-made Excel costing template that prices your whole menu from a target GP — built by a working chef, no sign-up to try.