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Restaurant Prime Cost Calculator

Enter your total food and beverage cost, total labor cost, and total sales for any period - a day, week, or month. The calculator gives you your prime cost in dollars and as a percentage of sales. The industry benchmark is below 65%. Above that, most restaurants struggle to cover rent, utilities, and other overheads and still make a profit.

Enter food cost, labor cost, and total sales to calculate your prime cost.
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This calculator provides estimates based on the numbers you enter. Results are for operational benchmarking only and are not accounting, tax, or financial advice. Consult a qualified accountant for formal financial reporting.

How to use this tool

  1. 1Enter your total food and beverage cost for the period - this is what you paid for all ingredients, drinks, and food supplies sold.
  2. 2Enter your total labor cost - include all wages, salaries, payroll taxes, and benefits for kitchen and front-of-house staff.
  3. 3Enter your total sales (revenue) for the same period before any deductions.
  4. 4Read your prime cost percentage. Under 60% is excellent. 60-65% is acceptable. Above 65% signals a problem to address.
  5. 5Use the individual food cost % and labor cost % breakdowns to identify which line needs attention.

Formula used

Prime cost = food cost + labor cost. Prime cost percentage = prime cost / total sales x 100. Food cost percentage = food cost / total sales x 100. Labor cost percentage = labor cost / total sales x 100. A healthy operation typically runs food cost at 28-35% and labor at 25-35%, giving a combined prime cost below 65%.

Example

Cafe: weekly food cost 1,800, labor 2,200, sales 7,500

Prime cost is 4,000. Prime cost percentage is 53.3% - well within the healthy range. Food cost is 24% and labor is 29.3%. This cafe has room to absorb a supplier price increase without breaching the 65% threshold.

Restaurant: monthly food 18,000, labor 22,000, sales 55,000

Prime cost is 40,000. Prime cost percentage is 72.7% - above the danger threshold. With rent, utilities, and other overheads still to cover, this restaurant is likely losing money. Food cost at 32.7% is acceptable but labor at 40% is the main driver. Reviewing schedule efficiency or pricing is urgent.

Common use cases

  • Weekly prime cost tracking to catch a problem before it shows up in the monthly P&L
  • Benchmarking your numbers against the 65% industry standard to assess overall health
  • Identifying whether food cost or labor cost is the bigger contributor to margin pressure
  • Stress-testing the impact of a staff pay rise or a supplier cost increase on prime cost percentage
  • Presenting performance to investors or business partners with a clear, industry-standard metric

Common mistakes

  • Not including all labor costs - prime cost labor must include payroll taxes, sick pay, and any employer contributions, not just base wages.
  • Using net sales instead of gross sales - always use total revenue before discounts, comps, or returns.
  • Measuring food cost on purchases rather than usage - use what was actually consumed during the period, not what was ordered.
  • Checking prime cost only monthly - weekly tracking catches problems four times faster and allows you to act while the period is still open.

Frequently asked questions

What is a good prime cost for a restaurant?

Under 60% is excellent. 60-65% is acceptable for most full-service concepts. Above 65%, profitability becomes very difficult once you add rent, utilities, marketing, and debt service. Quick service and counter concepts often target 55-60% because of lower labor needs.

What is included in labor cost for prime cost?

All employment costs: gross wages and salaries for all staff (kitchen and front-of-house), payroll taxes, employer national insurance or equivalent, paid leave accrual, and any benefits paid by the employer. If you use contractors for cleaning or bookkeeping, those are typically not included in prime cost labor - they are operating expenses.

What is included in food cost for prime cost?

All cost of goods sold for food and beverages: ingredients, packaged goods, beverages including alcohol, and any consumables that are part of the product delivered to the customer. Packaging and takeaway containers are sometimes included, sometimes treated separately - just be consistent.

How often should I calculate prime cost?

Weekly is the professional standard. Monthly prime cost tells you how the month went but gives you no time to act. Weekly prime cost lets you respond - adjusting schedules, running specials to use up high-cost stock, or reviewing portion sizes - while the problem is still current.

My prime cost is high. What should I do first?

First, separate food cost % and labor cost % to see which is the bigger driver. If food cost is high, review portion sizes, waste, and pricing. If labor is high, compare your scheduled hours against actual revenue for each shift and look for low-revenue periods where staffing can be reduced without affecting service.

Is prime cost the same as COGS plus wages?

Yes. Prime cost is equivalent to cost of goods sold (COGS) for a restaurant, plus total labor. In restaurant accounting, COGS is food and beverage cost. Labor is the second largest controllable cost. Together they are prime cost. Other costs like rent, insurance, and utilities are overheads that sit below prime cost in the P&L.

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