GP on drinks in an Irish pub: how to work it out, with euro examples

Most publicans know roughly what they pay for a keg. Fewer know what each pint actually makes once VAT, line cleaning and the odd free one for a regular come out. Gross profit (GP) on drinks is the number that tells you, and in Ireland the starting point is always the same: take off the 23% VAT first.

This guide shows the sums with worked examples for a pint, a spirit and mixer, wine by the glass and a soft drink. All prices and costs below are illustrative examples, not market rates; use your own invoices and price list.

The formula

Alcohol, soft drinks, bottled water, sports drinks and vegetable juices are all at Ireland's 23% standard VAT rate, whether served at the bar, with a meal or to take away. Revenue's guidance confirms they stay at 23% even as part of a restaurant service, so the July 2026 cut to 9% on food didn't touch the bar.

So, for any drink:

1. Net selling price = bar price ÷ 1.23
2. Cost per serve = purchase cost ex VAT ÷ number of serves you actually sell
3. GP in cash = net selling price − cost per serve
4. GP % = GP in cash ÷ net selling price × 100

If you're VAT registered you reclaim the VAT on your purchases, so use ex-VAT costs. If you're not sure how VAT applies to your business, ask your accountant; this isn't tax advice.

Worked example 1: a pint

Say a 50-litre keg of stout costs you €200.00 ex VAT. A pint is 568ml, so in theory the keg holds 88 pints (50,000 ÷ 568). In practice you lose some to line cleaning, fobbing and the first pour after a change. Allow 5% and you sell about 83.6 pints.

Calculate it on the €6.20 bar price instead and you'd get 61.5%, nine points higher than reality. That gap is the most common mistake in pub margins.

Worked example 2: a gin and tonic

A 70cl bottle of gin costs €28.00 ex VAT. Using a 35.5ml measure, a 700ml bottle gives 19 full measures (700 ÷ 35.5 = 19.7). A 200ml bottle of tonic costs €0.85 ex VAT.

The mixer is over a third of the cost of the serve. A premium tonic at double the price takes several points off the GP unless the price moves with it.

Worked example 3: wine by the glass

A 750ml bottle of house wine costs €9.00 ex VAT and you serve 175ml glasses.

Wine by the glass carries a hidden cost: the half bottle left open on a quiet Tuesday that goes in the sink on Thursday. If that happens weekly, build it into the cost per glass.

Worked example 4: a soft drink

A 200ml bottle of a branded mixer or soft drink costs €0.70 ex VAT and sells for €3.20.

Soft drinks usually earn the highest percentage on the bar, which is why the soft drink in a meal deal matters to your margin.

Pricing to a target GP

To find the bar price that hits a target GP, work backwards:

Bar price = cost per serve ÷ (1 − target GP) × 1.23

For the house wine above at a 70% target: €2.10 ÷ 0.30 = €7.00 net, × 1.23 = €8.61, so €8.60 or €8.65 on the board.

For the pint at a 55% target: €2.39 ÷ 0.45 = €5.31 net, × 1.23 = €6.53.

Very few pubs price every drink to one target. Pints are usually priced against the pub down the road, and spirits, wine and soft drinks make up the difference. The point is to know what each line earns, then decide. Our menu price calculator does these sums for you.

The legal floor: minimum unit pricing

Since 4 January 2022, alcohol in Ireland can't be sold below 10c per gram of alcohol. A standard drink contains 10g, so the floor for one standard drink is €1.

Section 11 of the Public Health (Alcohol) Act 2018 gives the formula:

Grams of alcohol = volume in ml × strength (ABV as a decimal) × 0.789 Minimum price = grams × €0.10

At the bar you'll be well above these. Where it bites is promotions and packages:

• Drink bundled with food or another service for one price: the law treats the alcohol as if it were sold on its own for that price, so it must still meet its own minimum.
• Several alcohol products sold together for one price: the alcohol in all of them counts towards the minimum.
• Wine at a function or bottles to take away: a cheap wine at a deep discount can fall below the floor.

Selling or advertising below the minimum price is an offence.

Promotions you can't run

Citizens Information lists drinks promotions that are illegal in Ireland:

• Happy hours, meaning lower prices at certain times of day
• Loyalty schemes that reward buying alcohol
• Alcohol free or cheaper with other products
• Price promotions of less than 3 days

So if a price is coming down, it has to stay down for at least three days and can't be tied to the time of day. More on the licensing side in pub licences and opening hours.

Why your actual GP is lower than the theory

Theoretical GP comes from the price list. Actual GP comes from stocktakes. The gap is usually:

• Line cleaning and fobbing beyond your allowance
• Over-pouring of spirits and wine without measures
• Staff and complimentary drinks not rung through
• Breakages and out-of-date stock
• Supplier price rises not passed on

Compare stock results to the till every period, and investigate any gap of more than a point or two.

A simple routine helps:

1. Count the same way every time: same day, same time, same person if you can, with full and part kegs and bottles recorded.
2. Work out actual GP: net sales for the period (after VAT) minus the cost of what was used (opening stock + purchases − closing stock), divided by net sales.
3. Compare it with theoretical GP from your price list and recipe costs.
4. Check the big lines first: draught and house spirits usually explain most of any gap.
5. Act on what you find: re-train on measures, tighten comp drinks, or move a price.

Where ShiftComplete fits

ShiftComplete doesn't do stocktakes or till reports. It runs the people and the records behind the bar: rosters built from staff availability and published to every phone, clocking in and out with hours downloadable as a spreadsheet, opening and closing checklists (including cellar and line-cleaning checks), and incident and maintenance logs, so a leaking keg coupling gets fixed, not mopped up nightly.

It's €1.99 per active staff member per month, free for 60 days with no card and no contract. For VAT on food versus drink, see VAT rates for hospitality.