Restaurant Labor Cost Percentage Calculator
Determine what percentage of your revenue is spent on labor costs — a key metric for restaurant profitability and operational efficiency.
Include wages, salaries, payroll taxes, benefits, and overtime
Gross food and beverage sales for the same period
Formula
Labor Cost % = (Total Labor Cost ÷ Total Revenue) × 100
- Total Labor Cost — All employee-related expenses: hourly wages, salaries, overtime, payroll taxes (FICA, FUTA, SUTA), health benefits, and workers' compensation.
- Total Revenue — Gross food and beverage sales (before discounts or comps in some models; gross is the most common industry standard).
- The result is expressed as a percentage, indicating how many cents of every dollar earned are spent on labor.
Assumptions & References
- Benchmarks sourced from the National Restaurant Association (NRA) 2023 State of the Restaurant Industry Report and Toast Restaurant Success Report 2023.
- Fast Food / QSR target range: 25–35% (lower due to limited service and automation).
- Casual Dining target range: 30–40% (most common full-service segment).
- Fine Dining target range: 35–45% (higher due to skilled, experienced staff).
- Café / Bakery target range: 35–45% (labour-intensive preparation).
- Bar / Nightclub target range: 20–30% (lower food prep, higher revenue per staff member).
- Combined labor + food cost (Prime Cost) should ideally remain below 60–65% of revenue.
- This calculator does not account for tipped wage credits, which can legally reduce direct wage costs in some jurisdictions.
- All figures are pre-tax and do not constitute financial or legal advice.