Restaurant Prime Cost Calculator
Prime cost is your food and beverage cost plus your labor cost. Together they are usually the two biggest numbers on a restaurant income statement, which is why owners watch them as a share of sales every month. Enter a month of numbers to see yours next to the medians the National Restaurant Association reports.
Uses the numbers you enter for one period. Benchmarks are survey medians, not targets: the National Restaurant Association notes its data is not meant as standards for individual restaurants. Where no median is published for a type, none is shown. Estimates only. This calculator is for educational purposes and is not financial, tax or legal advice.
What prime cost is
Prime cost = food and beverage cost + labor cost. Food and beverage cost is what you paid for what you sold (your cost of goods). Labor cost should include wages, salaries, payroll taxes and benefits, not just hourly pay, so the number reflects what the staff really costs you.
Prime cost percentage = prime cost ÷ sales. Whatever is left after prime cost has to cover rent, utilities, insurance, card fees, repairs, marketing and, last, profit.
A worked example
A restaurant does $80,000 of sales in a month. Food and beverage cost is $25,600 and total labor, including payroll taxes and benefits, is $27,200.
- Food and beverage cost: $25,600 ÷ $80,000 = 32.0%
- Labor cost: $27,200 ÷ $80,000 = 34.0%
- Prime cost: $52,800 ÷ $80,000 = 66.0%, leaving $27,200 (34%) for everything else and profit.
The industry medians
| Measure (2024 data) | Full-service | Limited-service |
|---|---|---|
| Food and non-alcohol beverage cost | 32.0% of sales | 32.4% of sales |
| Payroll and benefits | 36.5% of sales | not shown |
| Prime cost | not shown | 65% of sales |
These are medians from the National Restaurant Association's 2025 Restaurant Operations Data Abstract, which covers 2024. Half of the restaurants surveyed came in above each number and half below. Full-service restaurants with $2 million or more in sales reported a lower food and beverage median of 31.0%. Cells marked "not shown" are left blank because I could not find a median for them published by the Association itself.
How to use it
Track it every month from the same accounts, so changes mean something. A rising prime cost usually shows up first in one of the two halves: food cost from waste, portioning or supplier prices, labor cost from scheduling. The percentage tells you where to look; the line items tell you what to fix.
Sources: National Restaurant Association, "Restaurant operators kept food cost ratios in check in 2024" (food and non-alcohol beverage cost medians: 32.0% full-service, 32.4% limited-service, 31.0% for full-service operators with $2 million or more in sales). National Restaurant Association, 2025 Restaurant Operations Data Abstract, as summarized by the Wisconsin Restaurant Association (payroll and benefits median 36.5% of sales, full-service; prime cost median 65 cents per sales dollar, limited-service). Example calculated by Simple Money Advice.
Frequently Asked Questions
What is prime cost in a restaurant?
Prime cost is food and beverage cost plus total labor cost, including payroll taxes and benefits. Divided by sales, it shows how much of each sales dollar goes to the two biggest expenses before rent, utilities and everything else.
What is a typical restaurant prime cost?
The National Restaurant Association reported a median prime cost of 65 cents per sales dollar for limited-service restaurants in its 2025 Operations Data Abstract, covering 2024. It notes the medians are for comparison, not targets for any single restaurant.
What is a typical food cost percentage?
In 2024, food and non-alcohol beverage costs were a median of 32.0% of sales for full-service restaurants and 32.4% for limited-service restaurants, according to the National Restaurant Association.
Should labor cost include payroll taxes and benefits?
Yes. Prime cost uses the full cost of labor: wages and salaries plus payroll taxes, health insurance and other benefits. Leaving them out makes labor look smaller than it is.