Restaurant Labor Cost Percentage Calculator
Restaurant Labor Cost Percentage
Calculate your restaurant labor cost as a percentage of revenue including wages, benefits, payroll taxes, and overtime for all staff categories.
Formula
Total Labor = FOH Wages + BOH Wages + Management + Payroll Taxes; Labor Cost % = (Total Labor / Revenue) x 100
Frequently Asked Questions
What should restaurant labor cost percentage be?
Restaurant labor cost should be 25 to 35 percent of total revenue. Full-service restaurants run 30 to 35 percent, fast casual 25 to 30 percent, and quick-service 20 to 25 percent. Prime cost (food plus labor) should stay under 65 percent.
How can I reduce labor costs without cutting staff?
Cross-train employees to cover multiple roles, optimize scheduling using sales forecasts, reduce overtime through better shift planning, invest in kitchen technology, streamline prep processes, and use part-time staff during peak hours.
What is prime cost in a restaurant?
Prime cost is the sum of total food and beverage cost plus total labor cost. It is the single most important metric for restaurant profitability. A well-managed restaurant keeps prime cost between 55 and 65 percent of revenue.
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