Do you cost a cocktail on the inc-tax or ex-tax price?

Ex-tax, always. The tax on the sale is collected for the government, and the tax on the purchase is reclaimed, so neither belongs in the margin. A $24 drink in Australia is $21.82 of revenue.

How do you cost a syrup or a cordial?

As a recipe — sugar, water, fruit, acid, each at its ex-tax cost — divided by the volume you actually got, not the volume you put in. A cordial that started as 1.4 L of ingredients and yielded 1.15 L after straining costs about 20% more per millilitre than the naive sum suggests.

What about the butter in a fat wash, or the agar in a clarification?

They are paid for and used up, so they are costed, but they leave before the prep is finished, so they contribute nothing to the volume or the alcohol. Deluge marks these rows as strained out — costed, out of the yield.

Do you cost garnish and ice?

Garnish, yes — a fraction of an orange or a lime per serve is a real cost across a thousand drinks. Ice is usually treated as an overhead rather than a per-drink cost, but the dilution it adds is part of the serve size, which matters for the ABV on the spec card.

How do you cost a cocktail properly?

Jesse Williams · 18 September 2026

In one paragraph

A cocktail is costed properly when every ingredient is priced ex-tax per millilitre or gram, the preps behind it — syrups, cordials, infusions, clarifications, fat washes — are costed as recipes of their own with their real yield (what came out of the pot, not what went in), any batch it pours from is costed the same way, and the serve is the sum of those parts plus garnish. The number that matters is cost per serve set against the ex-tax price, and it only stays true if a change in any product's price flows through every prep, batch and drink that uses it.

Most cocktail costings I am shown are wrong in the same three places: the price is inc-tax, the house syrup is costed at what went into the pot, and the batch the drink pours from was never costed at all. Fix those and the number usually moves several points.

Start with the product, ex-tax

Every bottle, bag and punnet gets a cost per unit — per millilitre, per gram, per each — ex-tax, from the supplier’s price list or the invoice. If you buy by the case, the case price divided by the bottles in it. If the invoice shows the tax-inclusive figure, net it out on entry; a cost with tax in it overstates every margin downstream.

The unit matters as much as the price. Sugar is bought by weight and used by weight, but it takes up room in a syrup, so it needs a density to contribute to the volume. Mass never silently becomes volume; when it must, a density bridges them.

Preps are recipes

A syrup, a cordial, an infusion, a clarified juice, a fat-washed spirit — each is a recipe with its own ingredients, its own cost, and its own yield. The yield is what came out, measured, not the sum of what went in.

Take a lemongrass cordial: 700 mL water, 700 g sugar, 120 g lemongrass, a little citric and malic acid. The rows add up to roughly 1.4 L of liquid once the sugar dissolves. Strain out the lemongrass, lose some to the pot and the cloth, and you bottle 1.15 L. The cost per millilitre is the total ingredient cost divided by 1,150, not by 1,400 — about 20% higher than the naive figure. Multiply that across a season and it is not a rounding error.

Two things leave a prep without joining it. The fat cap in a brown-butter bourbon, the agar curds in a clarification, the spent botanicals in an infusion: bought, used, gone. They are costed, because you paid for them, and excluded from the volume and the alcohol, because they never became part of the drink. When a yield comes up short of the rows, the question is whether the liquid was strained (strength unchanged) or reduced (strength went up), and the answer changes the ABV on the card.

Batches pour from batches

A modern list runs on batches: a bottled Old Fashioned, a freezer Martini, a kegged Paloma, a daiquiri base shaken to order. A batch is a recipe that draws on preps and products — and a serve is a recipe that draws on the batch. The costing has to follow that chain: product → prep → batch → serve, with the yield loss at every step carried into the next.

Dilution is part of the chain too. A stirred batch with the water already in it is costed per serve at the diluted volume; a batch that takes its water in the glass is costed neat and the serve size accounts for the melt. Decide which, write it on the prep sheet, and cost it accordingly.

The serve

A cocktail’s cost per serve is the sum of its rows at their real per-unit costs — 60 mL from a batch that itself costs so much per millilitre, 15 mL of a cordial with its yield loss built in, a fraction of a piece of fruit for the garnish. Set it against the ex-tax price and you have the gross profit for that drink.

Say the serve costs $4.80 and sells for $24 in Australia. Ex-GST that is $21.82; the GP is 78%. Change the bourbon’s price and the batch moves, the serve moves, the menu’s GP moves.

Why a spreadsheet loses the chain

A spreadsheet can hold all of this for an afternoon. It cannot hold it through a price list update, a re-batched cordial and a new bartender’s recipe tweak, because each of those lives in a different cell that nothing connects. The cost of the Old Fashioned on the menu tab does not know that the bourbon on the products tab changed, and nobody re-derives the prep sheet from the new numbers.

That is the problem Deluge exists to solve: a product is costed once; preps, batches and drinks reference it by identity, not by name; a price change re-costs everything downstream on save; and the spec card, prep sheet and costed menu are views of the same record rather than files that were copied from it. The costing method above is the same whether you use the app or not — the app is what keeps it true next month.