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Restaurant labor cost calculator.
Enter total labor cost and revenue to get labor cost percentage. Add food cost and the calculator also returns prime cost — the best single read on restaurant health.
Wages + payroll tax + benefits for the period
Total sales for the same period
Fill in to also calculate prime cost
Labor cost %
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Status
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Prime cost %
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Formula: Labor Cost % = Total Labor ÷ Revenue × 100. Prime cost adds food + beverage cost; target prime cost is 55–60% for most full-service restaurants.
Want labor and food cost tracked together?
Try Stockcount freeBy Jeremy Dudet, founder of Stockcount · Last updated 2026-05-19
How to calculate restaurant labor cost
Labor cost percentage is your fully-loaded labor spend as a share of revenue. With food cost, it is one of the two largest controllable costs in a restaurant — and the more schedulable of the two.
Labor Cost % = Total Labor Cost ÷ Total Revenue × 100
What counts as labor cost
Use fully-loaded labor, not base wages. The real cost of an employee includes:
- Hourly wages and salaries — front of house, back of house, management.
- Employer payroll taxes — the employer share of FICA, federal and state unemployment.
- Workers’ compensation insurance.
- Benefits — health insurance, paid time off, any meal or transit benefit.
Base wages alone understate true labor cost by roughly 10–15%.
Worked example
A restaurant pays $7,800 in wages, $900 in payroll tax and workers comp, and $300 in benefits for the week — $9,000 fully loaded. Revenue for the week is $30,000. Food and beverage cost was $9,600.
Labor cost % = 9,000 ÷ 30,000 × 100 = 30.0%
Food cost % = 9,600 ÷ 30,000 × 100 = 32.0%
Prime cost % = (9,000 + 9,600) ÷ 30,000 × 100 = 62.0%
62% prime cost is slightly above the 55–60% target. With food at 32% and labor at 30%, both are individually defensible — the fix is trimming one of them by 2–3 points, usually whichever is easier to schedule against demand.
Why prime cost is the number that matters
Food cost and labor cost trade off against each other. A scratch kitchen has lower food cost but higher labor; a kitchen using more prepared product has higher food cost but lower labor. Looking at either number alone hides this. Prime cost — the two added together — is what actually has to stay under control. Target 55–60% for full-service; above 65% there is rarely enough left for rent, utilities, and owner profit.
Bringing labor cost down
- Schedule to forecasted demand. The most common labor leak is staffing to habit instead of to the expected demand curve for that specific day.
- Tighten shift overlaps. Two cooks doing a 45-minute handoff every shift is real money over a month.
- Watch prep labor. Prep that runs long, or is done twice because of poor par-level planning, inflates labor without touching service.
- Cross-train. When more people can cover more stations, you schedule fewer total bodies for the same coverage.
Cutting hours blindly hurts service and drives turnover. Schedule to the demand curve instead — see the food cost calculator for the other half of prime cost.
Frequently asked questions
- How do I calculate restaurant labor cost percentage?
- Labor Cost % = Total Labor Cost ÷ Total Revenue × 100. Total labor cost includes hourly wages, salaries, payroll taxes, and benefits — not just the base pay. A restaurant spending $9,000 on fully-loaded labor against $30,000 in sales has a 30% labor cost.
- What is a good labor cost percentage for a restaurant?
- Most full-service restaurants run labor between 25% and 35% of revenue. Quick-service tends to run lower (20–28%) because of simpler operations. Fine dining can run higher (35%+) because of service-staff intensity. Below 25% may signal understaffing that hurts service.
- What is prime cost?
- Prime cost is labor cost plus food and beverage cost, expressed as a percentage of revenue. It is the single best summary number for restaurant health because it captures the two largest controllable expenses. Target prime cost is 55–60% for most full-service restaurants; above 65% leaves too little for rent, utilities, and profit.
- Should labor cost include payroll taxes and benefits?
- Yes. Use fully-loaded labor cost — gross wages plus the employer share of payroll taxes (FICA, unemployment), workers comp, and any benefits. Calculating labor on base wages alone understates the real cost by roughly 10–15%.
- How often should I calculate labor cost?
- Weekly, alongside food cost. Labor is the most schedulable cost in a restaurant — a weekly read lets you adjust the next week's schedule before a bad trend compounds. Many operators also track daily labor as a percentage of daily sales during the shift.
- Labor cost is high — what should I look at first?
- Schedule against forecasted demand, not habit. Overlapping shift handoffs, prep labor that runs long, and salaried managers covering hourly gaps are the usual culprits. Cross-training so fewer people cover more stations also helps. Cutting hours blindly hurts service — schedule to the demand curve instead.
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Stockcount keeps food cost live from voice counts and invoice scans — so prime cost is one number away instead of a month-end spreadsheet exercise.