Restaurant Labor Cost Calculator
Labor is one of the two biggest costs in a restaurant, and the one you set every week when you write the schedule. Enter a week of sales and staffing, including what payroll taxes and benefits add, to see your labor cost as a share of sales, your sales per labor hour, and the hourly staff hours that would hit your target.
Counts hourly wages before tips, manager salaries and the percentage you enter for payroll taxes, workers compensation and benefits. Tips paid by customers are not a labor cost to the restaurant. Owner pay is left out unless you include yourself as a manager. Estimates only. This calculator is for educational purposes and is not financial, tax or legal advice.
What counts as labor cost
Everything you pay to have people working: hourly wages, manager salaries, and what you pay on top of them, like the employer share of Social Security and Medicare, unemployment insurance, workers compensation and benefits. Tips customers leave for staff aren’t your cost. Labor cost divided by sales for the same week is your labor percentage.
Sales per labor hour
Sales divided by the hourly staff hours you scheduled. It shows whether the schedule fits the business: if sales per labor hour drops on Tuesdays, Tuesday is overstaffed for what it brings in. Track it by day or by shift to find the hours to trim.
The example
$20,000 of sales with 320 hourly staff hours at $17 is $5,440 of wages. Add $1,800 for managers and 12% for payroll taxes and benefits, and labor costs $8,108.80, 40.5% of sales. Sales per labor hour are $62.50. To reach a 30% labor cost at the same wage and managers, the schedule would need about 209 hourly hours, or the same staff would need about $27,029 of sales.
The National Restaurant Association’s 2025 Restaurant Operations Data Abstract puts the median for payroll and benefits at 36.5% of sales for full-service restaurants in 2024 (Wisconsin Restaurant Association summary). A median for limited-service restaurants isn’t published in that summary, so none is shown. The prime cost calculator adds food cost to the picture.
Sources: Wisconsin Restaurant Association, summary of the National Restaurant Association 2025 Restaurant Operations Data Abstract. The example restaurant is made up for illustration.
Frequently Asked Questions
How do I calculate restaurant labor cost percentage?
Add up hourly wages, manager salaries, and payroll taxes, workers compensation and benefits for a period, then divide by sales for the same period. $8,108.80 of labor on $20,000 of sales is 40.5%.
What is a good labor cost percentage for a restaurant?
It depends on the concept. The National Restaurant Association reports a median of 36.5% of sales for payroll and benefits at full-service restaurants in 2024. No median for limited-service restaurants is published in the same summary.
What is sales per labor hour?
Sales divided by the hourly staff hours worked in the same period. It shows how much business each scheduled hour brings in, and is most useful tracked by day or shift to spot overstaffing.
Should tips count in labor cost?
No. Tips customers leave for staff are not a restaurant cost. Count the wages you pay, manager salaries, and the payroll taxes and benefits on top of them.