Labor cost
Last updated
Labor cost
Labor cost = wages + payroll taxes + benefits. Labor cost % = labor cost / sales.
Include allocated salaried managers when they work the locations you are measuring. A wage-only figure is a different statistic. Label it if that is all you have.
| Line | Amount |
|---|---|
| Wages | 9,800 |
| Payroll taxes | 980 |
| Benefits | 620 |
| Labor cost | 11,400 |
| Sales | 42,800 |
| Labor cost % | 26.6% |
What belongs in the numerator
Hourly wages are the obvious part. Payroll taxes and benefits are part of the same cost, because the restaurant pays them to have those people on the schedule. A percentage built from wages alone will not match a percentage built from the full payroll burden. Pick one definition and keep it on the weekly report.
Match the sales
Use the sales from the same days as the hours. A week that includes a paid holiday and a closed dining room needs that note on the page, or the percentage indicts the calendar.
No separate short guide is filed under this hub yet. The formula, the worked week, and the calculator are the current pages.
Guides in this hub
No short guide is filed here yet. The formula above is the current page.
Tools
Calculators that open on a worked example.
FAQ
Short answers to the questions this page is built to settle.
Do salaried managers count?
Yes, when you are measuring the cost of running the restaurant. Spread their cost across the locations they actually cover, and say how you spread it.