Labor Cost Percentage Calculator
Labour cost percentage and prime cost. Prime cost, labour plus food, is the figure that decides whether a restaurant works, and sixty to sixty-five percent is the ceiling.
Also called: restaurant labour cost, prime cost calculator.
26.41% labour cost. Together with food at 26.03%, prime cost is 52.44%, which is comfortably inside the workable range.
How this is calculated
Labour cost includes taxes and benefits, not just wages, which is a chunk people leave out and which shifts the percentage by several points. Adding food gives prime cost, the two costs an operator can actually control. Above sixty-five percent there is not enough left for rent, utilities and profit, which is why prime cost rather than either component is the number to manage.
the two controllable costs together, which is the number operators actually manage- L
- Labour cost
Method and limits
What it assumes
- All labour, including management, is in the wage figure.
What it deliberately does not model
- Owner labour taken as drawings rather than wages understates this considerably.
- The benchmark varies with service model: quick service runs lower labour than full service.
Formula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator
Frequently asked questions
- What prime cost should I target?
- Sixty to sixty-five percent for full service. Above that there is too little left to cover rent, utilities and any profit.