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.

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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 %) ]

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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)

| Effective commission | Multiply landed cost by |

|---|---|

| 15% (collection / self-delivery) | ~4.8× |

| 20% | ~5.3× |

| 25% | ~5.7× |

| 30% | ~6.3× |

| 35% | ~6.9× |

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, commission ti