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Labor Cost Percentage Calculator
Gross wages divided by sales understates labour by four to six points. This loads payroll tax, comp and benefits back in.
Common questions
What burden rate should I use?
Add employer payroll taxes (FICA, FUTA, SUTA), workers' compensation premium and any benefits, then divide by gross wages. In the US that usually lands between 15% and 25%; workers' comp for restaurants varies a lot by state.
Should salaried managers be included?
Yes. Any labour the restaurant pays for belongs in the number. Splitting it into fixed (salaried) and variable (hourly) is useful for break-even, but the headline percentage covers both.
Is there a target labor percentage?
It depends entirely on format — quick service runs 25–30%, fine dining 35–42%. The number that matters is prime cost: food plus labour together, at or under about 65% of sales for full service.