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Restaurant labor cost percentage

For this calculator, restaurant labor cost percentage is total labor cost for one period, divided by net food and beverage sales for the same period, multiplied by 100. Total labor cost is management pay plus staff wages plus employee benefits, using the same labor definition as the CostLora prime cost calculator. Every amount is your input. No target percentage is applied.

Calculator

Manager pay on payroll for the same period. Include owner pay only when it is wages or salary on payroll. Exclude owner draws, distributions, and unpaid owner time. Enter 0 if there is none.
Hourly wages, overtime, and salaries of staff who are not managers, for the same period. Exclude customer tips. A service charge is included only when it is already in the payroll total you enter. This is not a CostLora or BLS wage. Enter 0 if there is none.
Employer payroll taxes for the same period. Employer-paid benefits include health premiums the employer pays. Workers' compensation premiums are included separately. Exclude rent, utilities, marketing, credit-card fees, repairs, and other insurance. Enter 0 if there is none.
Food and beverage sales for the same period. For this calculator, use the amount after discounts, comps, and refunds. Some restaurant budgets use gross sales before comps. For this calculator, comps are deducted from sales. This is a CostLora scope choice, not a statement that the other convention is invalid. Exclude sales tax collected for a government, merchandise, and other non-food-and-beverage revenue.

Labor cost percentage · DERIVED

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Enter values to calculate.

Total labor cost · DERIVED

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Management pay percentage · DERIVED

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Staff wages percentage · DERIVED

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Employee benefits percentage · DERIVED

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Formula

Formula v1

Labor cost percentage = (Management pay + Staff wages + Employee benefits) ÷ Net food and beverage sales × 100

Total labor cost = Management pay + Staff wages + Employee benefits

Management pay percentage = Management pay ÷ Net food and beverage sales × 100

Staff wages percentage = Staff wages ÷ Net food and beverage sales × 100

Employee benefits percentage = Employee benefits ÷ Net food and beverage sales × 100

  • For this calculator, CostLora defines restaurant labor cost percentage as total labor cost divided by net food and beverage sales, multiplied by 100. Total labor cost is management pay plus staff wages plus employee benefits.
  • The labor definition is the one used by the CostLora prime cost calculator, split into three lines. Management pay is manager pay on payroll, including owner pay only when it is wages or salary on payroll. Staff wages are hourly wages, overtime, and salaries of staff who are not managers. Employee benefits are employer payroll taxes and employer-paid benefits, including health premiums the employer pays and workers' compensation premiums.
  • Labor excluded: customer tips, owner draws, owner distributions, unpaid owner time, contract labor that is not on payroll, contract cleaning, rent, utilities, marketing, credit-card fees, repairs, and other insurance. Employer-paid health premiums and workers' compensation are not part of that insurance exclusion.
  • Where you place an amount between management pay and staff wages changes the two component percentages, not the total labor cost or the labor cost percentage.
  • CostLora labor pages are wage estimates from BLS occupational statistics and leave out benefits and payroll taxes. Those wage figures are not these labor inputs, and this calculator does not use them.
  • The labor cost percentage is the primary result. Total labor cost is the sum of the three labor amounts. The three component percentages divide each labor amount by the same net sales.
  • The three component percentages are rounded separately, so their displayed sum can differ from the displayed labor cost percentage by up to 0.02 percentage points.
  • A percentage above 100 can occur from the amounts you entered. It is a reason to review those amounts. It is not a judgment about the restaurant.
  • Industry benchmark, not a government figure and not a target: the National Restaurant Association's 2025 Restaurant Operations Data Abstract reports 2024 medians for salaries and wages (including benefits) as a percentage of sales of 36.5% for full-service and 31.7% for limited-service respondents, from more than 900 restaurant operators. The Association states the data are not intended to represent standards or goals for individual restaurants. Its public articles do not itemize that line, so its scope may differ from this calculator's labor definition. This calculator does not compare your result with those figures.
  • This example is arithmetic only. CostLora does not apply an industry target or benchmark.

Assumptions and data sources

No default assumptions: every value is your input.

Every amount is your input. Total labor cost and the percentages are derived from those amounts. The sources describe the labor and sales definitions and, for the National Restaurant Association figures, an industry survey that is not a target. They do not supply your numbers. The RestaurantOwner documents are preliminary review copies, not the National Restaurant Association book.

Limitations

  • All four inputs should cover the same period, for example one week of labor with that week's net sales, or one month with that month's. This calculator does not collect dates and cannot independently verify that the periods match.
  • The calculator cannot detect tips, owner draws, contract labor, or non-labor costs typed into a labor field. The labels and help text define what belongs in each field.
  • Owner pay on payroll is included in management pay for this calculator. The Uniform System of Accounts for Restaurants places officers' salaries in corporate overhead, so a P&L in that format may show a lower labor line.
  • Not prime cost, not food cost percentage, not a schedule, not payroll software, and not a business health score. It does not compute sales per labor hour or front-of-house and back-of-house shares.
  • This calculator does not use BLS wage estimates, does not apply a target, and does not compare your result with any benchmark.

Examples

  • Example: Management pay 4200, Staff wages 9500, Employee benefits 2300, Net food and beverage sales 46000 → Labor cost percentage 34.78%, Total labor cost $16,000.00, Management pay percentage 9.13%, Staff wages percentage 20.65%, Employee benefits percentage 5.00%