How to Calculate Food Delivery Commission Costs

Most restaurant owners know roughly what their marketplace commission rate is. Far fewer know what a single order actually nets them after every deduction, or what the annual total looks like. This article gives you the formula, walks through a worked example in rupees, and ends with a way to compare a marketplace order with the same order placed on your own site. It is the arithmetic, not the argument; for how the fee structures came to be, read how restaurant delivery app commissions work.

The formula

For a single marketplace order:

Net to restaurant = Gross order value
                  − Commission (rate × commissionable value)
                  − Payment processing (if charged separately)
                  − Other platform deductions (ads, packaging fees, penalties)
                  − Promotion funding (your share of any discount)

Two details matter more than they look:

• Commissionable value. Most marketplaces calculate commission on the food value, before taxes and before delivery charges paid by the customer. Some include packaging charges. Your agreement defines it; read that clause.
• Customer-side fees such as platform fees or delivery fees paid by the customer are not yours. They do not reduce your net, but they do raise the price your customer paid, which affects whether they order again.

Monthly cost of a channel is then simply the per-order deductions multiplied by order count. The annual figure is the one that tends to change decisions.

What goes into each line

Rates vary by platform, city and contract. The figures below are published or reported ones, with their sources and dates, so you can see the shape of the arithmetic; substitute your own agreement’s numbers.

Line	Example figures	Source
Commission	Swiggy “typically” 17 to 25 per cent; Zomato reported at 10 to 28 per cent	Business Standard, 15 August 2024; Verdict citing NDTV Profit, 1 September 2025
Payment processing on a direct order	Razorpay lists 2 per cent per domestic transaction plus 18 per cent GST on the fee	Razorpay pricing page, May 2026

Marketplace commission usually already includes card processing. On a direct order the gateway fee is a separate, visible line, which is why it belongs in any honest comparison.

Worked example: a mid-sized restaurant

Assume a mid-sized restaurant doing 400 marketplace orders a month with an average food value of ₹450. Assume a commission rate of 22 per cent, which sits inside the ranges reported above; your own rate may be higher or lower.

Gross food value            ₹450
Commission at 22%           ₹99
Net before other deductions ₹351

Now suppose the restaurant funds half of a 10 per cent promotion on a quarter of its orders. On those orders:

Promotion cost to restaurant = ₹450 × 10% × 50% = ₹22.50

Averaged across all orders that adds about ₹5.60 per order. Net is roughly ₹345 per order.

Monthly and annual commission alone:

Monthly  = 400 × ₹99 = ₹39,600
Annual   = ₹39,600 × 12 = ₹4,75,200

The same order placed on the restaurant’s own site, paid through a gateway charging 2 per cent plus 18 per cent GST on that fee:

Gateway fee = ₹450 × 2% = ₹9.00
GST on fee  = ₹9.00 × 18% = ₹1.62
Net         = ₹450 − ₹10.62 = ₹439.38

That ignores delivery. If the restaurant books a rider through Porter where available, or uses its own rider, that trip cost has to come from somewhere: passed to the customer as a delivery charge, absorbed, or split. The delivery fee calculator is built for exactly that decision. It also ignores any subscription for the ordering software, which is on the pricing page rather than invented here.

A note on tax: since 1 January 2022, marketplaces in India pay the GST on restaurant services supplied through them, while a restaurant selling direct charges 5 per cent GST without input tax credit on its own invoices. The mechanics differ by channel; your accountant should confirm how your invoices and returns handle each.

Comparing channels on one order

The two routes for the same ₹450 order, side by side:

	Marketplace	Your own site
Commission	₹99 (22%)	₹0
Gateway fee	Included in the commission	₹10.62 (2% plus GST on the fee)
Difference per order before delivery		₹88.38
Difference per month before delivery		₹35,352 on 400 orders

The difference per order is what you have available to pay for delivery, fund the ordering software, and still come out ahead. Whether it does come out ahead depends on your delivery cost and on how many orders actually move.

The number that matters: how many orders move

No direct channel captures every marketplace order. Marketplaces do discovery; your site serves the people who already know you. A useful planning formula:

Monthly saving = Orders that move × (Commission per order − Direct cost per order)
                 − Monthly ordering software cost

Where direct cost per order is the gateway fee plus any delivery cost you absorb. Run it at 10, 20 and 30 per cent of orders moving. If the saving is positive at 10 per cent, the channel pays for itself quickly; if it only works at 50 per cent, be cautious.

A worked line for the example above, assuming 15 per cent of orders move (60 orders) and the restaurant absorbs ₹40 of rider cost per order:

60 × (₹99 − ₹10.62 − ₹40) = 60 × ₹48.38 = ₹2,903 per month before software cost

Modest, but it grows with every regular who switches, and it does not include the value of owning the customer relationship.

Common mistakes in the arithmetic

• Using the headline rate on the whole bill. Commission is usually on food value, not on the total the customer paid including taxes and customer fees.
• Forgetting promotions. Platform promotions are often partly funded by the restaurant. Add them.
• Ignoring gateway fees on direct orders. They are small but real.
• Assuming all orders move. They will not. Model a share.
• Comparing delivery orders with pickup orders. Commission rates differ by order type; compare like with like.

What to do next

Take last month’s marketplace statement, find the commissionable value and the actual deductions, and put them through the formula above. Then open the commission calculator, which runs the same arithmetic with your inputs, shows the formula it uses, and lets you set the share of orders you expect to move rather than assuming all of them will.