Enter a period of sales and payroll, split by front of house, kitchen, management and burden, and see your all-in labor percent, sales per labor hour, and exactly how many dollars and hours stand between you and target.
Net sales for the period, after comps and discounts, before tax and tips.
Everyone paid for the period. Tips paid out by guests are not labor cost; tip credits and service charges you pay out are.
Total hours worked by hourly staff for the period.
Get the Operator's Edge. Free weekly tools and cost control tips for restaurant, bar and club operators.
It gives you all-in labor cost as a percent of sales, the split between front of house, back of house, management and burden, your sales per labor hour, and the gap to target in dollars and in hours. Hours are the part most calculators skip, and hours are what a manager can actually change on tomorrow's schedule.
Pull net sales from the POS and payroll from your processor for the same period. Split hourly wages by department, add salaried management, and add the burden line (payroll taxes, workers' comp, benefits). If you do not have burden handy, use 20 percent of wages.
Add total hourly hours worked. This unlocks sales per labor hour and converts the dollar gap into hours per week, which is the number to take into the scheduling meeting.
Read the breakdown. Whichever department is furthest past its typical share is where to start, and the hours figure tells you how much the schedule has to move.
Labor cost percentage equals total payroll (hourly wages plus salaries plus burden) divided by net sales, times 100. Sales per labor hour equals net sales divided by total hourly hours worked. Hours to cut equals the dollar gap to target divided by your average loaded hourly wage.
Example: a full service restaurant doing $72,000 in a week with $8,900 of FOH wages, $7,400 of BOH wages, $3,800 of salaried management and $4,000 of burden has $24,100 of total labor. Divide 24,100 by 72,000 and labor is 33.5 percent of sales. Against a 30 percent target that is three and a half points over, worth about $2,500 a week, or roughly $130,000 a year if nothing changes.
| Concept | All-in labor | Sales per labor hour |
|---|---|---|
| Quick service / fast casual | 25 to 30 percent | $50 to $90 |
| Full service restaurant | 28 to 35 percent | $45 to $75 |
| Bar or beverage-led | 22 to 30 percent | $60 to $110 |
| Fine dining / private club | 33 to 40 percent | $40 to $65 |
Ranges vary by market wage rates, tip credit rules and service style. The full method, including what belongs in labor, is in the labor cost guide.
Build next week's schedule from a sales forecast and a labor budget, not from last week's schedule. See the scheduling guide.
Stagger start times and cut early on slow shifts. The first hour and the last hour of every shift are where most wasted labor hides.
Track the running labor percent daily on the manager log. By Wednesday you know whether the week needs fixing.
Add every payroll dollar for the period: hourly wages for front and back of house, salaried managers, and the burden on top of wages (payroll taxes, workers' comp, benefits). Divide by total net sales and multiply by 100. Leaving out burden or salaried managers makes the number look 5 to 8 points better than it is.
Full service restaurants usually run 28 to 35 percent of sales all-in. Quick service runs 25 to 30, bar-led concepts 22 to 30, and fine dining and clubs 33 to 40 because of service levels. The right number depends on price point and concept, and the trend matters more than the industry average.
Sales per labor hour (SPLH) is net sales divided by total hours worked in the period. It is the best single productivity number because it ignores wage rates and shows how well the schedule matched the volume. Full service restaurants typically land between $45 and $75; quick service $50 to $90.
Divide the dollar gap by your average loaded hourly wage to get the hours per period. If you are $4,000 a month over target and your loaded wage is $19 an hour, that is about 210 hours a month, or around 50 hours a week, usually found by cutting early on slow shifts and tightening opening and closing crews rather than cutting whole positions.
Yes. Payroll taxes, workers' comp, health benefits and paid time off are real cash costs of having the staff. Most operators carry a burden of 18 to 22 percent of wages. A labor percent that leaves it out is not comparable to any benchmark.
Daily running total and weekly review. Labor is the one prime cost line you can change tomorrow. If Wednesday's running week is over target, Thursday through Sunday can still fix it.
Labor is half of prime cost. Put it next to food and beverage in the free prime cost calculator, or get the weekly Prime Cost Check sheet that tracks all three.
Run your prime cost Read the labor cost guideRules of thumb only. Results are estimates and not financial advice.
