RESTAURANT / FREE OPERATOR TOOLS
Labor Cost Percentage Calculator
Include wages, payroll taxes and benefits for the same sales period.
Default numbers are an example, not industry data.
Formula
Labor cost % = (wages + payroll taxes + benefits) ÷ sales × 100.
How it works
Labor cost percentage compares fully loaded staffing costs with sales. Include wages, overtime, employer payroll taxes and benefits earned for the same period, even if the payroll payment date falls later.
Exclude an owner draw for unpaid work; it is not a payroll expense. If the owner receives wages, include those wages and associated employer costs. Use net sales excluding VAT or sales tax, and investigate scheduling, overtime and sales mix before cutting hours that support service.
Worked example
10,000 wages + 1,500 taxes + 500 benefits = 12,000 labor cost. Against 40,000 sales, that is 30.00%.
Benchmark
Many full-service restaurant operators aim for roughly 25–35% as a rule of thumb.
Frequently asked questions
Should payroll taxes and benefits be included?
Yes. Include employer payroll taxes and benefits alongside wages to measure fully loaded labor cost.
Do I include an owner draw?
Exclude draws for unpaid owner work. Include actual owner payroll costs where applicable; consider unpaid owner hours separately when planning staffing.
Why does labor percentage rise when sales fall?
Some staffing hours remain necessary even with fewer guests. Compare similar periods and review both paid hours and sales rather than the ratio alone.
Are my inputs saved or uploaded?
Calculations run in your browser. Inputs are not uploaded by the calculator. Sharing puts the inputs in a readable URL; anyone with that link can see them.