Total labor cost as a share of sales — the other half of prime cost, commonly managed in the 30-35% range.
Labor Cost Percentage
Total labor cost as a share of sales — the other half of prime cost, commonly managed in the 30-35% range.
Labor cost percentage is total labor — wages plus payroll taxes and benefits — divided by sales. Most restaurants run labor around 30-35% of revenue, though it skews higher in quick-service (often 35-40%) and lower in fine dining (sometimes 25% or less, where higher check averages absorb skilled kitchen labor).
Labor is the half of prime cost that moves day to day, so operators manage it shift by shift against forecasted covers.
- What it includes: hourly wages, salaried managers, overtime, payroll taxes, and benefits — not just the base hourly rate.
- How software helps: scheduling platforms like 7shifts, When I Work, and HotSchedules build schedules against sales forecasts and flag approaching overtime.
Controlling labor also means controlling time theft — early clock-ins and late clock-outs of 10-15 minutes add up to hundreds of dollars a month — which enforced punch rules address.