In short
- Labor cost % = total labor / sales. $9,000 of labor on $30,000 of sales is 30%.
- Prime cost = food cost + labor. It is the number most owners watch every week.
- Count payroll taxes and benefits too. Enter your own rate; we assume none.
- Type a labor target to see the hours you can afford at your sales.
- Free, runs in your browser, nothing is saved or sent.
This restaurant labor cost calculator turns one week of sales and schedules into labor cost %, prime cost and sales per labor hour. Use your payroll report, not memory. It takes about three minutes.
| Labor line | Cost | % of sales |
|---|
How the math works
- Add the pay
Hours times wage for each row, plus weekly salaries. 400 hours at $15 is $6,000.
- Add taxes and benefits
Multiply pay by one plus your own percentage. The tool takes your number and assumes none.
- Divide by sales
Use sales for the same week as the pay. Mismatched periods are the most common error.
- Add food cost for prime cost
Labor plus food, divided by sales. It shows what is left for rent, fees and profit.
Same week, same basis: if payroll runs Monday to Sunday, use Monday to Sunday sales. A holiday week or a slow week will swing the percentage a lot, so check two or three weeks before changing the schedule.
What the outputs tell you
| Output | What it answers |
|---|---|
| Labor cost % | How much of each sales dollar goes to people |
| Prime cost % | Food plus labor together; what remains pays rent, fees and you |
| Sales per labor hour | How much each paid hour produces; compare shifts and days |
| Hours you can afford | A ceiling at your target and sales level, not a schedule |
A commonly cited reference: Restaurant365 says the prime cost of a sustainable restaurant is approximately 60% of sales, a little higher for full service. Your concept, rent and menu change what is right for you, so set your own target from your break-even math.
How to lower labor cost without hurting service
- Schedule to sales. Compare sales per labor hour by day and daypart, then trim the hours that produce least.
- Cross-train. Staff who can cover two stations let you run a leaner shift.
- Cut overtime first. Overtime hours cost more per hour than shifting those hours to another person.
- Prep smarter. Prep during slow windows; avoid paying for idle hours at peak wages.
- Reduce turnover. Hiring and training new staff is a hidden cost; steady teams work faster.
- Take online orders directly. Orders that arrive already paid and itemized reduce phone time.
Do not cut so far that service slows and guests stop returning. A saved wage that costs you regulars is a loss.
Pair this with the restaurant food cost calculator for the food side, and the break-even calculator for all fixed costs. Weekly, TX Openings tracks new Texas restaurants and bars from public records. Want an ordering page of your own? See direct online ordering for Texas restaurants.
Frequently asked questions
How do I calculate labor cost percentage?
Add up all pay for the week (hourly wages times hours, plus salaries), add your payroll taxes and benefits, then divide by sales for the same week and multiply by 100. If labor costs $9,000 on $30,000 of sales, labor cost is 30 percent.
What is prime cost in a restaurant?
Prime cost is food cost plus labor cost, the two biggest controllable costs. Divide it by sales for prime cost percent. Restaurant365 says a sustainable restaurant's prime cost is approximately 60 percent of sales, with full service a little higher. Treat that as a commonly cited reference, not your target.
What should I enter for payroll taxes and benefits?
Enter your own percentage. Your payroll provider or accountant can tell you what employer taxes, workers' compensation and benefits add on top of gross pay. This tool assumes no rate for you. Enter 0 to see pay only.
Do tips count as labor cost?
Count what you actually pay out of your own payroll: wages, including the cash wage for tipped staff. Tips that guests pay straight to staff are not your expense, though employer taxes on them may be. Ask your accountant how your payroll reports it.
How do I find the hours I can afford?
Enter a labor cost % target. The tool turns it into a weekly dollar budget, subtracts salaried pay, and divides the rest by your average loaded hourly cost. That is a ceiling for hours at this sales level, not a schedule.
Is my data saved or sent?
No. The math runs in your browser and nothing you type is stored or sent anywhere. The starting numbers are placeholders; replace them with your own.