Calculate takeaway delivery charges by adding driver time, vehicle costs and delivery expenses, then deciding what each basket can contribute. Set the customer’s fee to support your target contribution, and test the result against real routes, completed orders and demand.
Picture Friday evening at your takeaway. A driver collects a bag, checks the address and heads towards a nearby estate.
The customer pays £3 for delivery. However, the journey involves traffic, parking and a return trip.
Does that £3 cover the delivery? Your records can answer that.
This guide helps UK takeaway owners calculate delivery costs and choose suitable customer charges. You will follow one order, compare pricing methods and build a practical review process.
Every financial example uses stated assumptions. Replace those assumptions with your actual costs before setting your fees.
What Should Takeaway Delivery Charges Cover?
Takeaway delivery charges should contribute towards the cost of getting an order from your premises to the customer. Those costs can include driver time, vehicle use and delivery-specific supplies. Your menu contribution may cover part of the cost, depending on your pricing strategy.
Three figures matter:
FigureMeaningDelivery costWhat your business spends fulfilling the deliveryCustomer delivery feeWhat the customer pays for that serviceDelivery subsidyThe delivery cost your business absorbs through the order’s contribution
For example, a delivery might cost £8 while the customer pays £3. Your business then absorbs the remaining £5.
That can work if the basket leaves enough contribution. It needs careful review when smaller or discounted orders leave less.
A customer delivery fee is not the same as marketplace commission. Include all applicable charges when assessing the complete order.
Calculate Your Cost Per Delivery
Calculate restaurant delivery costs by combining driver time, vehicle costs and other delivery-specific expenses. Use recorded journeys and actual invoices wherever possible.
Start with this formula:
Cost per delivery = allocated driver cost + vehicle cost + other delivery-specific costs
Then check your calculation against the whole shift. This helps identify waiting time or expenses that individual journey estimates miss.
Step 1: Measure Driver Time
Measure how long the driver remains occupied by the delivery. Include loading, travel, parking, handover and the return journey where applicable.
Use:
Driver cost = allocated minutes ÷ 60 × fully loaded hourly cost
Your fully loaded cost may include pay, relevant employer costs and paid leave allocations. Use your actual staffing arrangement.
For a hypothetical £16 hourly cost and a 24-minute delivery cycle:
24 ÷ 60 × £16 = £6.40
The £16 figure is an illustrative business cost. It is not a recommended wage or industry average.
Step 2: Calculate Vehicle Costs
Calculate vehicle costs using the full relevant route. Include return mileage where the driver returns to your takeaway.
Possible costs include:
- Fuel or charging.
- Maintenance and tyres.
- Vehicle depreciation or lease costs.
- Suitable insurance.
- Parking charges.
Use either a supported mileage allocation or an appropriate share of actual expenses. Avoid adding both for the same costs.
For example:
4 miles × £0.35 allocated vehicle cost = £1.40
The 35p figure is an example assumption. It is not a tax allowance or recommended reimbursement rate.
If your driver’s payment already includes vehicle costs, avoid counting them again.
Step 3: Add Delivery-Specific Expenses
Add expenses that belong specifically to delivery. Examples might include seals, additional transport packaging or a courier booking charge.
Exclude anything already deducted elsewhere. Counting the same packaging in two places would overstate your delivery cost.
For outsourced deliveries, start with the actual courier invoice. Check minimum charges, waiting fees, cancellations and other applicable extras.
Follow One Order From Counter to Door
This example produces an £8 delivery cost using the assumptions below. It follows a single delivery and return journey.
At 7:05pm, the driver collects the order. They drive to the customer, park and complete the handover.
They return at 7:29pm, ready for another order. The full cycle takes 24 minutes and covers four miles.
Cost itemCalculationAmountDriver time24 minutes ÷ 60 × £16£6.40Vehicle allocation4 miles × £0.35£1.40Delivery-specific suppliesAssumed cost£0.20Total delivery cost£6.40 + £1.40 + £0.20£8.00
These are illustrative figures, not OrderApps customer results.
For simplicity, this example assumes a business that is not VAT registered. Costs include any non-recoverable VAT.
VAT-registered businesses should use a consistent accounting basis. Convert internal calculations into the correct customer-facing prices.
Check the Whole Shift
Individual deliveries do not explain every paid minute. Drivers may also wait between orders or perform other duties.
Suppose your recorded journeys account for only part of a paid shift. Allocate the remaining time appropriately.
You can cross-check using:
Shift delivery cost per order = total delivery-related shift costs ÷ completed deliveries
Compare this result with your journey estimates. Investigate differences before choosing your takeaway delivery charges.
Set Your Customer Delivery Fee
Set your customer delivery fee by deciding how much delivery cost the basket can support. Check the contribution remaining after delivery against your business target.
Use this planning formula:
Required retained delivery fee = delivery cost + target contribution − basket contribution before delivery
Basket contribution means revenue remaining after the variable order costs included in your calculation. Deduct food, standard packaging, discounts and relevant order charges consistently.
It is not net profit.
Work Through a £25 Basket
Assume a £25 basket leaves £10 before delivery. That represents a 40% contribution under this example’s cost model.
The delivery costs £8. You want £5 remaining towards overheads and profit.
Your calculation becomes:
£8 delivery cost + £5 target − £10 basket contribution = £3
You therefore need to retain £3 from delivery.
CalculationAmountBasket contribution before delivery£10Retained delivery fee£3Delivery cost−£8Remaining contribution£5
This example assumes no further deduction from the £3 fee. If charges apply to that fee, calculate the amount you actually retain.
The remaining £5 still needs to support fixed overheads and profit. It is not guaranteed net profit.
Test Smaller Baskets Too
Now picture a £15 basket with the same 40% contribution rate. It leaves £6 before delivery.
With a retained £3 delivery fee and £8 delivery cost, only £1 remains.
That explains why your fee and minimum order need to work together. One flat charge may perform differently across basket sizes.
Compare Flat, Distance and Zone Pricing
Choose the delivery pricing method that best reflects your routes and remains easy for customers to understand. Start with the simplest approach that supports your costs.
MethodHow it worksUseful whenWhat to checkFlat feeOne fee across the service areaDelivery costs vary littleLonger routes may absorb more contributionDistance pricingFee changes with calculated distanceDistance broadly reflects costsConfirm road distance versus straight-line distanceZone pricingEach area has a defined feeRoutes have distinct costsCheck boundaries and customer messagesFree delivery above a thresholdFee disappears above a basket valueLarger baskets support deliveryRecalculate discounted and lower-margin baskets
Flat Delivery Fees
Flat fees make the offer easy to communicate. They work best when route costs remain reasonably consistent.
However, compare your shortest and longest journeys. A single fee can hide expensive outer-area deliveries.
Distance-Based Delivery Charges
Distance-based charges can reflect longer routes more closely. However, mileage alone does not capture traffic or difficult access.
A short trip through congestion may take longer than a more distant journey. Check the time behind the distance.
Delivery Zone Charges
Zones let you group areas with similar delivery costs. Keep the structure simple enough for customers and staff.
Here is an illustrative comparison using a £10 basket contribution:
ZoneDelivery costRetained feeRemaining contributionNearby£5£2£7Middle£8£3£5Outer£11£4£3
The outer zone leaves less despite its higher fee. You might need a different minimum basket or service boundary.
Confirm your platform’s supported pricing options before publishing zone rules.
Account for Shared Delivery Runs
Shared delivery runs can reduce the allocated cost per order when stops follow a sensible route. Calculate the whole run before dividing its costs.
Suppose a two-order run costs £12. An equal allocation would assign £6 to each delivery.
However, equal allocation may not reflect the real journey. One distant stop might create most of the additional cost.
Use a consistent method, such as allocating time and mileage by stop. Record how you make the calculation.
Also check both customers’ waiting times. Combining drops should still support your food transport controls and service promise.
Avoid planning every order around perfect shared runs. Your fee structure should also account for quieter periods and single deliveries.
Connect Fees With Minimum Orders
Delivery fees, minimum orders and free-delivery thresholds should support the same cost model. Review them together before launching an offer.
A minimum order determines whether a basket qualifies for delivery. A free-delivery threshold determines when you waive the fee.
For a detailed calculation, read ourtakeaway minimum order value guide.
Calculate a Free-Delivery Threshold
Use:
Required basket = (delivery cost + target contribution) ÷ basket contribution rate
With an £8 delivery cost, £5 target and 40% contribution rate:
(£8 + £5) ÷ 0.40 = £32.50
Under these assumptions, a £32.50 basket supports the target without a delivery fee.
This does not make £32.50 suitable for every takeaway. Different menus and delivery arrangements produce different results.
Test promotions separately. Discounts can reduce the contribution available to fund free delivery.
Display Takeaway Delivery Charges Clearly
Display takeaway delivery charges clearly wherever customers need them to understand your offer. Show the applicable total as soon as you can reasonably calculate it.
The Competition and Markets Authority updated its price transparency summary in January 2026. It states:
“Prices must be clear, complete and accurate.”
Its guidance explains mandatory charges and location-dependent delivery pricing.
Read theCMA’s price transparency guidance when planning your price displays.
Where a charge cannot yet be calculated, provide prominent information explaining how customers can calculate it. Include the applicable charge in the total once known.
GOV.UK’sdistance-selling guidance also covers delivery arrangements, costs and other information customers need before ordering.
Write Useful Customer Messages
A location-dependent message could say:
Delivery charges depend on your address. Enter your postcode to see your applicable fee and minimum order.
Provide the relevant pricing information prominently alongside this message. A postcode prompt alone should not replace required price information.
Once the address qualifies, show something specific:
Delivery to your address: £3. Minimum food and drink spend: £15.
Use figures and conditions matching your actual settings.
Configure and Test Your Delivery Settings
Configure your delivery rules, then complete test orders from representative addresses. Check the customer price and operational details together.
OrderApps’online ordering system supports delivery and collection settings, delivery zones and minimum order values. Confirm your required fee structure during setup.
Follow these steps:
- Define your service area. Use routes your team can serve reliably.
- Choose a supported fee structure. Confirm flat, distance or zone requirements with your provider.
- Set qualifying minimums. Check how discounts affect eligibility.
- Write clear pricing messages. Explain delivery conditions early.
- Test boundary addresses. Include addresses just inside and outside each area.
- Complete a delivery order. Check the fee, total, confirmation and delivery address.
- Test collection separately. Confirm that delivery charges do not carry over incorrectly.
OrderApps’takeaway ordering platform connects direct ordering with your website, app and EPOS. Discuss your delivery workflow with the team.
Include the applicableOrderApps plan and transaction charges in your wider order-cost calculations. Avoid counting charges twice.
Review Your Delivery Pricing
Review your delivery pricing using actual costs, completed orders and total contribution. A fee change needs more than a comparison of revenue.
Track these figures by service period or delivery zone:
- Completed delivery orders.
- Customer delivery fees collected.
- Driver hours and delivery mileage.
- Courier invoices.
- Average basket contribution.
- Remaining contribution after delivery.
- Checkout completion, where measurable.
- Delivery complaints and refunds.
Compare similar weekdays and trading conditions. Record promotions, closures and unusual traffic.
Change one main pricing rule at a time where practical. Then allow enough orders to understand the result.
If fewer deliveries complete, check whether collection increases. Some customers may choose a different fulfilment option rather than stop ordering.
Set Delivery Charges With Confidence
Useful takeaway delivery charges balance real fulfilment costs with the contribution available from customer baskets. Measure the full journey, calculate carefully and explain the price clearly.
Return to that Friday-night order. You now know what the driver’s trip costs and what the basket contributes.
The delivery fee becomes a deliberate pricing decision.
Want help setting up delivery pricing and direct orders?Book a free OrderApps demo to discuss delivery settings, minimum orders and collection.
Frequently Asked Questions
How Much Should a Takeaway Charge for Delivery?
A takeaway should base its delivery fee on actual fulfilment costs and the contribution available from each basket. Calculate driver time, vehicle use and delivery-specific expenses. Then decide how much the business can absorb. Test the resulting fee against completed orders and total contribution.
How Do You Calculate Delivery Cost Per Mile?
Calculate vehicle cost per mile by dividing relevant vehicle expenses by the mileage associated with those expenses. Use a consistent accounting period and avoid double-counting reimbursements. Driver time usually needs a separate calculation. A mileage figure alone does not capture waiting, parking or customer handover.
Should Drivers’ Return Journeys Be Included?
Include return journeys when drivers must return to your premises before taking another order. For shared runs, allocate the relevant journey costs consistently. Where a courier charges per delivery, review what the quoted fee includes. The calculation should reflect the delivery arrangement your business actually uses.
Can a £3 Delivery Fee Cover Costs?
A £3 delivery fee may cover some deliveries, but it will not cover every operating model. Check the actual amount retained after relevant deductions. Then compare that amount with driver, vehicle and delivery-specific costs. Your basket contribution may need to fund the remaining cost.
Should Delivery Charges Increase With Distance?
Delivery charges can increase where longer journeys create higher fulfilment costs. However, distance should not be your only measure. Traffic, parking and difficult access also affect driver time. Compare recorded costs across routes before choosing distance-based charges or grouping addresses into delivery zones.
Is Free Delivery Profitable for Takeaways?
Free delivery can work when the basket contributes enough to cover delivery costs and your target contribution. Calculate the threshold using actual basket margins. Test discounted and lower-margin orders separately. The customer pays no delivery fee, but your business still needs to fund the journey.
How Often Should Delivery Charges Be Reviewed?
Review delivery charges whenever driver costs, courier rates, fuel costs or service areas change materially. Also review them during routine financial checks. Compare similar trading periods and examine total contribution. Avoid changing prices solely because one unusually busy or quiet shift produced different results.
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