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Part of the Impos venue-specific POS guides series
To calculate pour cost, divide the cost of the product used by your GST-exclusive beverage sales and multiply by 100. To control it, compare that actual figure against what your POS recipes say you should have used, then close the gap with measured pours, recorded wastage and a fixed stocktake routine.
For most Australian bars, pour cost should sit roughly between 18% and 25% depending on what you pour. Every point above your target is gross profit walking out the door, one heavy-handed nip at a time.
This guide covers both halves of the job:
Key takeaways
Pour cost is the cost of the liquor and ingredients used to make a drink, expressed as a percentage of the price you sell it for. A drink that costs you $2.50 to make and sells for $10.00 (ex GST) has a 25% pour cost, which leaves 75% gross profit to pay wages, rent, power and, eventually, you.
Definition: Pour cost (also called beverage cost or liquor cost percentage) = cost of product used ÷ revenue from that product × 100.
The terms get used interchangeably on the floor, but they measure slightly different things. Knowing which one you are looking at matters when you compare reports.
Pour cost and GP% are two sides of the same number. If your spirits run at a 20% pour cost, your spirits GP is 80%. Most stocktakers and accountants in Australia report GP%, while bar managers tend to talk in pour cost, so it helps to be fluent in both.
You calculate pour cost by dividing the cost of the product used by the GST-exclusive revenue it generated, then multiplying by 100. There are two versions you need: one for a single drink (used for pricing) and one for a trading period (used for control).
Use this formula for every drink on your list:
Pour cost % = (cost of every ingredient in the serve ÷ selling price ex GST) × 100
Australian bars should work in millilitres, not ounces. Most US guides assume 750ml bottles and 1.5oz pours, which throws the maths out for a venue pouring 30ml nips from 700ml bottles.
Worked example: house vodka and soda
Period pour cost tells you what actually happened behind the bar, including every over-pour, spill and unrung drink. You need a stocktake at the start and end of the period, plus your purchase invoices.
Cost of goods used = opening stock + purchases − closing stock
Period pour cost % = (cost of goods used ÷ beverage sales ex GST) × 100
Value opening and closing stock at the same cost basis every time. Mixing last-invoice prices with average prices between counts creates a variance that is purely on paper.
Pour cost must be calculated on GST-exclusive revenue because the 10% GST on each drink belongs to the ATO, not to your bar. Supplier invoices for registered businesses are entered ex GST, so your sales figure needs to match.
Using the vodka soda above, the same $2.28 serve looks like a 19.0% pour cost on the $12.00 shelf price, but it is really 20.9% on the $10.91 you keep. That two-point gap is enough to hide a genuine over-pouring problem. Most competitor guides written for the US market skip this step entirely, because US menu prices are shown before sales tax.
Each category behaves differently, so the cleanest way to understand pour cost is to cost one serve of each. The figures below are illustrative. Plug in your own supplier prices.
A 50 litre keg holds 117.6 schooners (425ml) in theory, but you will never sell all of them. Line cleaning, foam on the first pours of a fresh keg and the dregs left at changeover all reduce your real yield.
In the example above, a $260 keg gives a theoretical cost of $2.21 per schooner. At a 5% loss you sell roughly 112 schooners, so the real cost is $2.33. Measure your own yield by tracking schooners and pints sold per keg in your POS reports for a month, then build that loss factor into your recipe costs.
Use these standard Australian glass sizes when costing taps:
Glass names and sizes vary between states, so cost to the volume your venue actually pours.
Cocktails carry more ingredients, which means more places for cost to creep in. Cost every component, including house-made syrups, cordials, fresh juice and garnish. A 30ml shot of fresh lime juice that nobody costed can add 2 or 3 points to a cocktail’s pour cost.
If you batch pre-mixes or house syrups, cost the batch once and divide by the number of serves it yields. Impos supports bulk or prep recipe items, so a house sugar syrup or a batched Negroni can be built as its own stock item and then used inside other drink recipes. Raw ingredients are decremented in batches, and every cocktail that uses the batch pulls the right cost through automatically.
A good overall pour cost for an Australian bar is roughly 18% to 25%, but the right target depends on your product mix. Australian industry benchmarks put bar beverage cost in the 18% to 25% range, and individual categories sit above and below that.
Two things to keep in mind when you compare yourself to these numbers.
Your blended number depends on your mix. A cocktail bar selling mostly spirits might run 19% overall, while a pub with a heavy tap beer and wine trade could run 27% and still be well managed. Compare each category against its own target, not against the venue down the road.
Lower is not always better. A pour cost that is too low usually means your prices are too high for your market, and you will see it in falling volume. The goal is the pour cost that maximises gross profit dollars, not the smallest percentage on the report.
Theoretical pour cost is what your bar should have spent on product based on what the POS says you sold, while actual pour cost is what your stocktake shows you really used. The difference between them is your variance, and it is the most useful number in bar management.
Theoretical pour cost = sum of (recipe cost × quantity sold) for every drink ÷ beverage sales ex GST
Actual pour cost = (opening stock + purchases − closing stock) ÷ beverage sales ex GST
Variance = actual pour cost − theoretical pour cost
Back to the four-week example. Your actual pour cost was 23.4% ($13,100 used). If your POS recipe data shows the drinks you sold should have used $11,760 of stock, your theoretical pour cost is 21.0%.
That 2.4-point variance is $1,340 of unaccounted product in four weeks, or more than $16,000 a year, from one bar.
Most well-run bars aim to keep variance within 1% to 2% of sales. Tight operators do better. One Impos venue consistently keeps weekly stock variance under 1% across food and beverage, using Impos stock management with every sale rung through the POS.
A high pour cost is almost always caused by product leaving the bar without being paid for, or by prices that have not kept up with supplier costs. These are the eight leaks to check first.
Over-pouring is the most common cause of a high pour cost, and it adds up faster than most managers expect. A 35ml pour instead of 30ml is 16.7% more product.
On the house vodka above, that extra 5ml costs $0.32 per drink. At 400 spirit serves a week, that is $128 a week, or about $6,700 a year, from one bar and one product range. Jiggers, measured pourers or spirit dispensers and regular spot checks fix this.
If a drink is poured but not entered into the POS, it shows up as variance at stocktake. Common culprits are rounds put together during a rush, “I’ll ring it in later” orders and drinks for regulars. A fast POS layout matters here, because staff skip steps when the screen slows them down.
Shouts, staff knock-off drinks, returned drinks and spills are all legitimate costs, but only if they are recorded. Set up dedicated POS buttons for wastage, comps and staff drinks, so they show as known losses rather than unexplained variance.
A staff member who rings a house spirit when they poured a premium one creates two errors at once: one product looks short and another looks over. Clear button layouts and product groupings reduce keying errors.
Line cleaning, fobbing, poor gas pressure and incorrect temperature all reduce keg yield. Track sales per keg and investigate any keg that yields well below your average.
Short deliveries that are signed for, and invoice prices that rise without anyone noticing, both push up pour cost. Check every delivery against the purchase order, and compare invoice prices to your last order before you approve them.
By-the-glass wine that oxidises before it is sold is pure cost. Track opened bottles, rotate stock and consider fewer by-the-glass lines if wastage is consistently high.
Theft is the cause nobody wants to name, and it should be the last conclusion you reach after ruling out the others. Limit access to high-value stock, restrict who can process voids, refunds and discounts, and review those reports weekly.
Australian alcohol excise is indexed to inflation twice a year, in February and August, so your cost per nip rises automatically even if your supplier’s base price does not. If your menu prices stay the same, your pour cost creeps up every six months.
From 3 August 2026, excise on spirits is $110.15 per litre of alcohol, after a CPI indexation factor of 1.020. That works out to $30.84 in excise alone on a 700ml bottle of 40% spirit. Spirits have been indexed dozens of times, and the rate was around $81 per litre of alcohol a decade ago.
Draught beer is different for now. In August 2025 the federal government froze excise on draught beer for two years, until August 2027. Spirits were not included in the freeze, which means the cost gap between your taps and your back bar is widening.
What this means for your pricing calendar:
To price a drink from your target pour cost, divide the ingredient cost by the target percentage to get the ex GST price, then multiply by 1.1 to add GST.
Menu price (inc GST) = (ingredient cost ÷ target pour cost) × 1.1
Using the vodka soda: $2.28 ÷ 0.20 = $11.40 ex GST. Add GST: $11.40 × 1.1 = $12.54, which you would round to $12.50 or $13.00.
A quick reference for common targets:
A premium whisky at 28% pour cost might earn you $9.00 gross profit per serve, while a house spirit at 18% earns $8.00. The higher percentage drink still puts more money in the till. Use pour cost to set a floor, then look at gross profit dollars per drink when you decide what to promote.
For more ways to improve your profit margins beyond the bar, see our margin guide for hospitality owners.
Sort your drinks by both popularity and gross profit using your POS reports. Promote high-profit drinks that are not selling, reprice popular drinks with thin margins, and remove slow, low-margin lines that tie up stock. Impos item breakdown and sales margin reports show COGS and GP% by item, so this review takes minutes, not a weekend with spreadsheets.
You control pour cost with a stock control routine that keeps your actual pour cost close to your theoretical one. It follows the same cycle every week: order, receive, store, sell, count and investigate.
A par level is the amount of each product you need on hand to get through until the next delivery, plus a small buffer. If your par for house vodka is 6 bottles and you have 2, you order 4. Pars stop you running out mid-service and stop cash sitting on the shelf as excess stock.
Review pars seasonally. A beer garden bar’s summer par for cider will be very different from its July par.
Scanning barcodes at receiving speeds this up and removes keying errors.
Keep high-value spirits and wine in a locked store with limited access. Use first in, first out (FIFO) rotation, especially for beer with best-before dates and opened wine. Issue stock from the store to the bar in a recorded way, so you know what moved and when.
Count at the same time of day, before trade, using the same units. Partial bottles can be estimated in tenths or weighed for more accuracy.
Variance only helps if someone acts on it. Each week:
A bar POS with built-in stock management controls pour cost by deducting every ingredient from stock the moment a drink is sold, so your theoretical usage is calculated automatically and variance shows up between stocktakes rather than months later.
Impos was built for the Melbourne bar scene, and its stock management is designed around the way bars actually pour.
Drink measurements in Impos can be configured to the millilitre, so a 30ml nip, a 45ml cocktail base and a 15ml liqueur float all decrement the right amount. Multiple stock items can be assigned to a single menu item, which means a cocktail pulls tequila, triple sec, lime and salt from stock in one sale. Each stock item can be set up with up to five different sizes per menu item, covering a nip, a double, a cocktail measure and more.
Supplier prices change, and excise moves twice a year. Impos stock management calculates the average cost of each item using a weighted average formula, so your recipe costs and GP% reflect what you have actually paid across recent orders rather than one invoice.
Create purchase orders from up-to-the-minute stock levels or your order history, and email them straight to suppliers. When deliveries arrive, scan item barcodes with your POS barcode scanner to log them into stock. Order history by supplier makes it easy to spot price changes over time.
Impos includes more than 80 sets of reports. For stock control, the most useful are:
Purchases can also be exported to your accounting software through Impos accounting integrations, so you are not entering invoices twice.
Authority access means only authorised staff can use sensitive functions such as voids, discounts and refunds. For late-night venues, the POS can also be synced with a security camera solution, so you can match transactions to footage from the venue or remotely over a secure connection.
If you want dedicated beverage cost tools, Impos integrates with partners built for exactly this job. Drinking The Profits is an online program designed to control beverage costs, and Invoice Ripper matches electronic orders to invoices while flagging items that have changed in price or arrived in the wrong quantity. Lightyear automates purchasing and accounts payable data entry.
Every manually keyed EFTPOS amount is a chance for a mistake. With the Impos POS + Payments Bundle, the sale total moves from the POS to the terminal automatically, so your sales reporting and your settlement figures describe the same transactions. Clean sales data is the starting point for an accurate pour cost.
Many bars still run stock on a clipboard and a spreadsheet. It can work, but it relies on someone finding the time to rekey every invoice and every count, and it only tells you about a problem weeks after it started.
A POS-integrated system changes the timing. Because stock is deducted with every sale, you can see theoretical usage at any point, compare it with a spot count of your top spirits and act within the same week.
Before you commit to a bar POS, check that its stock management can handle the way your venue pours, not just the way it sells. These three questions separate a bar-ready system from a generic retail till.
Pour cost % equals the cost of product used divided by beverage sales (ex GST), multiplied by 100. For a single drink, divide the ingredient cost by the GST-exclusive menu price. For a period, use opening stock plus purchases minus closing stock, divided by beverage sales for that period.
No. Pour cost should be calculated on GST-exclusive sales and GST-exclusive purchase costs. Including GST in your sales figure makes your pour cost look about two points lower than it really is.
A 700ml bottle holds 23.3 nips of 30ml in theory. In practice, allow for a small loss to spillage and the last few millilitres in the bottle when you cost your drinks.
A cocktail bar typically targets a blended pour cost of 18% to 25%. Signature cocktails can often run at the lower end because guests value the skill and presentation, while premium spirit serves will sit higher.
Count your highest-value spirits weekly, the full bar fortnightly or monthly, and bring in an external stocktaker quarterly or at the end of the financial year. The more often you compare actual usage with theoretical usage, the sooner you catch a problem.
Pour cost is the share of the selling price spent on product, while GP% is the share left over after product costs. They always add up to 100%. A 22% pour cost is a 78% GP.
The most common causes are over-pouring, drinks not rung through the POS, unrecorded comps and wastage, wrong POS buttons, keg yield loss, receiving errors and theft. Recording wastage and comps through dedicated POS buttons removes the legitimate losses from your variance, so what remains is easier to investigate.
A POS with built-in stock management reduces pour cost by making every sale a recorded stock movement, calculating theoretical usage automatically and flagging variance quickly. Impos estimates that venues using Impos stock management save an average of 3% on cost of goods. On a venue turning over about $1 million a year with a 40% cost of goods, that is around $30,000 a year in extra profit.
Still in the planning stage? Our guide to opening a bar covers fit-out, licensing and systems.
Impos POS was born in the Melbourne bar scene and now runs in more than 3,000 hospitality venues across Australia. If you want stock deducted to the millilitre, variance reports on the day and integrated payments that keep your sales data clean, see how Impos works for bars or talk to the Impos team on 1300 308 615.
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