Restaurant Labor Cost Calculator
Labor is your biggest controllable cost. Know your exact percentage before overstaffing costs you the week.
| Role | Hrs | Wages | % of labor |
|---|
What is the Labor Cost Percentage Calculator?
The Labor Cost Percentage Calculator shows restaurant operators their labor cost as a share of sales — front and back of house, taxes and benefits included — and flags where scheduling is out of line with revenue by daypart.
How is it calculated?
Enter weekly sales and your labor spend: hourly wages by role, salaried management, payroll taxes, and benefits. The calculator returns labor cost percentage, prime cost when combined with food cost, and the sales-per-labor-hour benchmark.
Worked example: what’s the labor cost % on $18,000 in weekly sales?
- Add up weekly wages
Cook 40 hrs x $18 = $720, server 30 hrs x $12 = $360, host 20 hrs x $15 = $300. Total wages = $1,380.
- Add payroll burden (14%)
Employer taxes + workers comp: $1,380 x 0.14 = $193. This sits on top of wages, not inside them.
- Get total labor cost
$1,380 wages + $193 burden = $1,573 in total labor for the week.
- Divide by weekly sales
$1,573 / $18,000 = 8.7%, which the tool rounds to 9% labor cost.
- Compare to the benchmark
9% is well under the 25-35% range. Reaching the 25% floor would allow up to $4,500 of labor, so you have ~$2,927 of headroom. Verdict: very lean staffing – swap in your real hours to see where you actually land.
What does your labor cost percentage actually mean?
| Labor cost % | Status | What it usually signals | Move to make |
|---|---|---|---|
| Under 25% | Lean | Understaffed or unusually strong sales | Check service quality still holds up |
| 25-30% | Healthy | Well-managed staffing for most concepts | Hold the line and protect it |
| 30-35% | Watch | Upper end of the typical benchmark | Trim overtime, tighten the schedule |
| Over 35% | High | Overstaffed or soft revenue week | Cut hours or drive more sales |
Frequently Asked Questions
What should labor cost be in a restaurant?
Full-service restaurants typically run 30–35% of sales; quick service 25–30%; fine dining can reach 35–40%. Include payroll taxes and benefits, not just wages — they add 10–15% to raw payroll. Above these bands, scheduling usually leads the problem list.
What is prime cost and why does it matter most?
Prime cost is food plus labor — the two controllable giants. Healthy full-service restaurants keep prime cost at or under 60–65% of sales; above that, rent and fixed costs leave nothing. It’s the single fastest health check for any food operation.
How do I lower labor cost without cutting service?
Schedule to sales forecasts by daypart instead of copying last week, cross-train staff to flex between stations, stagger start times around true rush windows, and track sales per labor hour weekly. Most operators find 2–4 points of labor savings in scheduling before any headcount change.
Are payroll taxes part of labor cost?
Yes — employer FICA (7.65%), unemployment insurance, workers’ comp, and any benefits are real labor dollars. A $16/hour cook truly costs $18–19. Calculating labor percentage on raw wages alone understates the number by 2–3 points and hides the problem.
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