Restaurant Labor Cost Calculator
Add each staff member with their role, hours worked, and hourly rate. Enter the revenue for the same period. The calculator gives you total labor cost, labor cost as a percentage of revenue, and labor cost per cover if you enter the number of covers served.
Staff
| Name / role | Hours | Hourly rate | |
|---|---|---|---|
How to use this tool
- 1Add each staff member who worked the period - include kitchen, front-of-house, bar staff, and any managers on hourly rates.
- 2Enter hours worked and hourly pay rate for each staff member. Use actual hours worked, not scheduled hours.
- 3Enter the total revenue for the same period - a shift, a day, or a week.
- 4Optionally enter the number of covers served to get labor cost per cover.
- 5Read total labor cost, labor percentage, and the comparison to your target labor percentage.
Formula used
Example
Chef: 144. Sous: 120. FOH x3: 264. Bar: 72. Total labor: 600. Revenue 3,200, labor cost 18.75% - excellent for a dinner service. 120 covers served: labor per cover 5.00.
Kitchen: 140. FOH: 110. Total: 250. Labor cost: 31.25% of 800 revenue. Labor per cover: 7.14. High labor percentage signals this lunch service may not be covering its costs. Consider reducing staffing or closing for lunch if it persistently runs above 30%.
Common use cases
- Reviewing each shift's labor cost against actual revenue to identify consistently high-cost periods
- Calculating the labor cost of adding an extra staff member to a shift before scheduling them
- Building a weekly labor cost summary to compare against prime cost targets
- Deciding whether a slow lunch or early week period is worth staffing based on labor percentage
- Training managers to schedule based on labor cost targets rather than habit or guesswork
Common mistakes
- Not including employer taxes and payroll on-costs - gross wages are not the full cost of employment. Add 10-20% for employer taxes and benefits.
- Using scheduled hours instead of actual hours - always reconcile to timesheets or clock-in records for accurate cost tracking.
- Forgetting unpaid breaks - if staff take a 30-minute unpaid break, their chargeable hours are 30 minutes less than their shift length.
- Tracking labor cost weekly without breaking it down by service or day - a good weekly total can hide a terrible Tuesday lunch that subsidises a strong Saturday night.
Frequently asked questions
What labor cost percentage should a restaurant target?
Most full-service restaurants target 28-35% labor cost as a percentage of revenue. Quick service and fast casual often achieve 22-28% due to lower staffing ratios. The labor target should be set alongside the food cost target so that prime cost (food + labor) stays below 65%.
Should I include the owner's wage in labor cost?
If the owner works in the business, yes - include a market-rate wage for their role. Not including it overstates profitability and makes benchmarking misleading. If the owner takes profit distributions instead of a wage, track this separately but understand it affects true operating cost.
How do I reduce labor cost without cutting service quality?
Review your scheduling versus actual cover counts - the biggest gains come from reducing labor during consistently low-revenue periods. Cross-train staff to cover multiple roles. Reduce management hours during quiet services. Consider whether all prep can be done by fewer people at lower-cost times. Small reductions in scheduled hours across the week add up to significant annual savings.
Related tools
Last updated