Labor Cost Percentage Calculator
Wages plus the burden on top of them, against the revenue they produced. Enter a week or a month — whatever period you close your books on.
Wages plus the burden on top of them, against the revenue they produced. Enter a week or a month — whatever period you close your books on.
Enter at least one wage figure and the revenue for the same period — a week, a month, whatever you close your books on.
Labor cost % = (total labor cost ÷ total revenue) × 100
The word doing the work is total. Gross wages are only part of what an employee costs you: employer payroll taxes, workers comp, insurance, and any benefits add roughly 10–20% on top. Track wages alone and every staffing decision you make is based on a number that is quietly too small.
A month: $18,400 in hourly wages, $7,200 in salaries, 15% burden. Wages are $25,600, burden adds $3,840, total labor is $29,440. On $86,000 of revenue that is 34.2% — inside the full-service band, with not much room.
Labor percentage is a ratio, so it moves when either side moves. A jump can mean you overstaffed, or it can mean a slow week — the percentage looks identical either way. Pair it with labor dollars per hour worked, or per cover, before you cut a shift.
It also belongs next to food cost rather than on its own. Together they make prime cost, which is the number that actually predicts whether a restaurant survives.
Labor cost percentage = (total labor cost ÷ total revenue) × 100, for the same period. Total labor cost means wages plus payroll taxes, insurance, and benefits — not wages alone. If labor runs $29,400 all-in on $86,000 of revenue, that is 34.2%.
Full-service restaurants typically land between 30% and 35%. Quick service runs leaner at 25–30% because the menu and the service model need fewer hands. Fine dining often exceeds 35% and accepts it, because the service itself is the product.
It should. Employer payroll taxes, workers comp, insurance, and any benefits typically add 10–20% on top of gross wages. Operators who track wages only are understating labor by roughly a third of a point for every point of burden they ignore — and it is the difference between a number that looks fine and one that is real.
Usually revenue, not hours. Labor percentage has a denominator: a slow week raises the percentage even with an unchanged schedule. Check labor dollars per hour worked alongside the percentage — if the dollars are flat and the percentage jumped, you had a sales problem, not a staffing problem.
Labor is half of prime cost. Freecost handles the other half — free recipe costing that keeps every dish priced against live ingredient costs.
Start free — no credit cardFreecost is free recipe-costing software built by a chef. Web + Android.