Restaurant prime cost calculator: weekly food, bar and labor

Prime cost is your food and beverage cost plus all your labor. Divide it by net sales to get prime cost as a percentage.

Prime cost = food cost + beverage cost + total labor

Prime cost % = prime cost ÷ net sales × 100

Example: a week with 13,000 dollars of food cost, 2,900 dollars of beverage cost and 14,800 dollars of labor has a prime cost of 30,700 dollars. On 48,000 dollars of net sales, that is 64.0%.

Food cost is the beginning count plus purchases minus the ending count. It is the same arithmetic the IRS uses for cost of goods sold in Publication 334.

Food cost = beginning inventory + purchases − ending inventory

Example: 6,200 dollars on the shelf Monday, 12,900 dollars of invoices received during the week and 6,100 dollars counted the next Monday gives a food cost of 13,000 dollars. Do the same for beverages.

Purchases alone swing with delivery days, so count on the same day and time each week. Our inventory count variance report helps find where a count went wrong.

Total labor is hourly wages, salaried wages, payroll taxes and benefits. Leave out any of them and prime cost reads low.

Total labor = hourly wages + salaried wages + payroll taxes + benefits

• Employer payroll taxes: the employer pays 6.2% Social Security and 1.45% Medicare on wages, 7.65% in all (IRS Topic 751). State unemployment tax and workers’ comp are extra.
• Toast: its Labor Cost Breakdown report leaves out salaried jobs. Add salaries from payroll.
• Square: its labor vs. sales report compares hourly labor cost to net sales. Add salaries, taxes and benefits from payroll.

Example: 10,400 dollars hourly, 2,500 dollars for one week of salaries and 1,900 dollars of taxes and benefits is 14,800 dollars of labor. To figure the full rate for each person, use the labor burden calculator.

A common rule of thumb is 55% to 60% of sales. Restaurant365 lists 55% to 60% for quick service and fast casual, 60% to 65% for full service, and under 60% for bars. Fine dining runs higher than full service.

Treat them as industry rules of thumb. Set the target that fits your menu, prices and rent.

Dollar gap to target = prime cost − (target % × net sales)

Example: at a 60% target, the 48,000 dollar week can spend 28,800 dollars. Its 30,700 dollar prime cost is 1,900 dollars over. Each point of prime cost that week is worth 480 dollars.

Run it every Monday for the week before. Save the week, and the log shows food, beverage, labor and prime cost side by side with the change from last week.

• Sales: net sales from your Toast or Square sales summary for the same dates.
• Counts and purchases: your Monday counts and the invoices received that week.
• Labor: your payroll register, with one week’s share of salaries.
• Past weeks: paste them from Excel or Google Sheets, or drop a CSV. Columns can be week ending, net sales, food cost, beverage cost and labor.

When food cost is the line that moved, the recipe cost calculator re-costs the plates. For a report built from every invoice and timecard each week, see Reports & answers.