Free calculator
Restaurant labour cost calculator.
Combine gross wages with employer taxes, benefits and other recorded employment costs for the same period.
This is an operational ratio, not a staffing recommendation. Compare equivalent periods and consider service level, opening hours, demand and local employment rules.
Reviewed: 5 September 2026
Formula: (gross wages + employer costs) ÷ net revenue × 100. This is not the complete prime cost.
Use sales and payroll from the same period
Choose one restaurant and one week or month before collecting the inputs. Match the sales period with when the work was performed, even if payroll was paid later. Use net sales on a consistent basis, excluding VAT or sales tax collected on behalf of the authorities.
- ✓ Net revenue: sales for the chosen period, after discounts and refunds.
- ✓ Gross wages: pay before employee deductions, including relevant overtime and bonuses.
- ✓ Employer costs: additional employer contributions and benefits not already included in gross wages.
Worked example: €45,000 in monthly sales
Illustrative example: gross wages of €11,800 plus employer costs of €3,650 give total labour cost of €15,450. Divide €15,450 by €45,000 in net revenue and multiply by 100: the labour cost percentage is 34.3% when rounded to one decimal place.
- ✓ Total labour cost: €11,800 + €3,650 = €15,450.
- ✓ Labour cost percentage: €15,450 ÷ €45,000 × 100 = 34.3%.
- ✓ Revenue after labour: €29,550, before food, rent and other costs.
Check what is missing or counted twice
Take the inputs from payroll and employer-cost records, not just the amount transferred to employees. Do not add employee deductions again if they are already part of gross wages. If owner working time or agency cover is excluded, note that when comparing periods. This calculator does not determine statutory contribution rates.
Understand why the percentage changed
A higher percentage does not necessarily mean wages increased. With labour cost unchanged at €15,450, a fall in net revenue to €40,000 raises the ratio to 38.6%. Compare sales, hours worked, covers and service requirements before changing a rota. There is no universal target suited to every restaurant.
Combine labour with food cost for prime cost
Labour percentage covers only one part of operating costs. To calculate prime cost, combine food and beverage cost with labour for the same period and revenue scope. The revenue left after labour is not restaurant profit.
Related product
Connect labour and food cost to restaurant profitability
Review the operating-profit picture alongside the restaurant records and coverage behind it.
Frequently asked questions
Clear, verifiable answers
Should I enter take-home pay or gross wages?
Use gross wages before employee deductions. Enter additional employer costs separately, without counting amounts already included in gross wages twice.
Can I compare a weekly payroll with monthly revenue?
No. Use wages, employer costs and revenue covering the same dates and location. Otherwise the resulting percentage is misleading.
What happens when revenue is zero?
A labour percentage cannot be calculated against zero revenue. The calculator shows a dash for that ratio; it can still show the entered labour cost.
Next step
Review the workflow with your restaurant's data and roles.
A demonstration should show the real product, its limits and how it fits your operation.