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How to price a cake: a worked example with real costs

Charge at least what the cake costs you to make, with your own time counted as a cost, then add a profit on top. For a 16-slice pound cake that costs $7.31 in ingredients, $1.50 for a box and 1 hour 30 minutes of baking, that comes to $47, or $2.94 a slice. The rest of this page shows where every dollar of that comes from, so you can swap in your own numbers.

The sum in one line

Price = (ingredients + packaging + your time + running costs + any fixed fee) ÷ (1 − card fee % − profit %)

The fees and the profit are shares of the price you charge, not of your costs. That is why the sum divides by "one minus the shares" instead of multiplying the costs by 1.2. Multiplying costs by 1.2 gives you less than 20% profit once a card fee comes out of the price.

Worked example: a pound cake for 16

A pound cake is traditionally made with equal weights of flour, butter, sugar and eggs (the French name, quatre-quarts, means "four quarters"; Wikipedia, read 2026-10-03). This example uses one pound of each and cuts the cake into 16 slices. Those two choices are assumptions of this example, not rules.

Step 1: ingredients, $7.31

Prices are the U.S. average shop prices for August 2026 from the U.S. Bureau of Labor Statistics, read on FRED on 2026-10-03 (it showed them as updated September 11, 2026).

IngredientAmountPrice (source below)Cost
Butter, stick1 lb$4.021 a lb$4.02
Sugar, white1 lb$1.024 a lb$1.02
Flour, all purpose1 lb$0.548 a lb$0.55
Eggs, large1 lb, which is 9.07 eggs$2.272 a dozen$1.72
Ingredients$7.31

How the eggs work out: one large egg weighs 50 g in King Arthur Baking's ingredient weight chart (read 2026-10-03), and a pound is 453.59 g, so a pound is 453.59 ÷ 50 = 9.07 eggs. Then 9.07 ÷ 12 × $2.272 = $1.72.

These are national averages. What you pay at your own supplier is the number that counts, so replace them with your receipts.

Step 2: packaging, $1.50

A cake box. This is an assumption for the example, not an average. Use what a box costs you.

Step 3: your time, $26.79

The example uses 1 hour 30 minutes. That is also an assumption: time the bake from your own start to finish, including mixing, baking, cooling, decorating, boxing and the clean-up that belongs to this order.

For the hourly rate, the U.S. Bureau of Labor Statistics lists the 2025 median pay for bakers as $17.86 an hour (Occupational Outlook Handbook, read 2026-10-03). That is what bakers employed by someone else are paid, so treat it as a starting point for your own wage, not as the market price of your cakes.

1.5 hours × $17.86 = $26.79

Step 4: running costs, $0 in this example

Oven energy, tins, a share of your phone and insurance, delivery: whatever you pay to run the business. A way to do it: add up a month of those costs and divide by the orders you take in a month. The example uses $0 so the other steps stay visible. Yours will not be $0.

Step 5: fees and profit, and the price

So far the cake costs $7.31 + $1.50 + $26.79 = $35.60.

Now the card fee and the profit. The example uses Stripe's standard U.S. online fee, which its pricing page (read 2026-10-03) gives as "2.9% + 30¢" per successful card charge, and a profit of 20% of the price. The 20% is an assumption. It is a placeholder so there is a number to start from, not a market figure. Your payment app's page shows its own fee.

(35.60 + 0.30) ÷ (1 − 0.029 − 0.20) = 35.90 ÷ 0.771 = 46.56, rounded up to $47

Check the answer: at $47 the card fee is 47 × 0.029 + 0.30 = $1.66, which leaves 47 − 35.60 − 1.66 = $9.74 of profit, a little over 20% of the price because of the rounding up. Per slice, $47 ÷ 16 = $2.94.

Without the box and the card fee the same cake comes to $43 (34.10 ÷ 0.80 = 42.62, rounded up). That is the number the free calculator shows when you first open it.

Do you earn a wage at your current price?

Say you charge $25 for this cake now. After the $7.31 of ingredients, $25 − $7.31 = $17.69 is left to pay for 1.5 hours, which is about $11.80 an hour (the calculator, which keeps the cents of the ingredient cost, shows $11.80), before the box and any fees. That is below the $17.86 median wage in Step 3. The price is not wrong because a sum says so, but if you have been wondering why the work feels unpaid, this is the check that shows it.

How much to charge for a cake for 40 or 50 people

Do not take a small cake's price and multiply it by the number of slices. A bigger order uses more ingredients, but your time and your fixed costs do not grow in step. Work the bigger order out from its own costs.

Here is one example of how that goes, built from the pound cake above and clearly labelled as assumptions. Suppose the order is three of those cakes, cut into 48 slices.

  • Ingredients: 3 × $7.31 = $21.92
  • Packaging: 3 boxes at $1.50 = $4.50 (assumption)
  • Time, if the three together take 3 hours: 3 × $17.86 = $53.58 (assumption: with the oven full, three cakes may not take three times as long)
  • One card payment: $0.30 fixed fee, 2.9%, and 20% profit as before

(21.92 + 4.50 + 53.58 + 0.30) ÷ 0.771 = 80.30 ÷ 0.771 = 104.15, rounded up to $105, or $2.19 a slice.

Now suppose the same three cakes take 4 hours 30 minutes, which is 3 × $26.79 = $80.37 of your time:

(21.92 + 4.50 + 80.37 + 0.30) ÷ 0.771 = 107.09 ÷ 0.771 = 138.9, rounded up to $139, or $2.90 a slice.

The ingredients are the same in both. The 90 minutes of difference moved the price by $34. For a big order, the number that matters most is your own time, so time yourself on the first one. Simply tripling the $47 price would have given $141, which is right only if your time really does triple. This example does not tell you how many slices a given tier or tray should be cut into, or how many a guest needs. Those depend on how you cut it, so use your own.

Pricing other baked goods

Cookies, cupcakes and loaves use the same sum. Cost one whole batch with every ingredient, the packaging for the whole batch and the time for the whole batch, divide by the share that is profit and fees, then divide by the number you get out of the batch. Selling from a home kitchen is subject to rules that depend on where you live; this page does not cover them, so check yours before you price for sale.

Make it yours

  • Sales tax. Where it applies it is added to the price you charge. It is not worked into the price here.
  • Your supplier. The ingredient prices are U.S. national averages for one month.
  • Your wage and profit. $17.86 and 20% are starting points, not rules, and the market may pay more or less for your cakes.
  • Fees. Stripe's rate is an example; other apps and other cards differ.
  • Rounding. Prices here round up to the next whole dollar. Pick the rounding that suits your customers.

Sources

All read on 2026-10-03.

Check your own numbers

The free cake price calculator does this exact sum with your prices: type what you paid and how long the bake takes, and it shows the least you should charge and every step of the sum. It is built to fit a phone screen needs no sign-up, and keeps nothing you type.