How to calculate prime cost
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Prime cost
Prime cost = food COGS + beverage COGS + labor. Prime cost % = prime cost / total sales.
Labor includes wages, payroll taxes, and benefits. Food and beverage costs come from counts, not from the week's invoices alone.
| Line | Amount |
|---|---|
| Food cost | 12,040 |
| Beverage cost | 0 |
| Labor | 13,700 |
| Prime cost | 25,740 |
| Sales | 42,800 |
| Prime cost % | 60.1% |
Do the food cost first
Food cost on this week is 8,400 plus 11,200 minus 7,560, which is 12,040. That piece is the same week as the food-cost guide. Beverage is entered as zero so you can see the addition. A real bar would put beverage usage in that line, from its own count.
Then labor, then sales
Labor in the illustration is 13,700, already including taxes and benefits. Prime cost is 12,040 plus 0 plus 13,700, which is 25,740. Divided by 42,800 of sales, the percentage is 60.1.
The limited-service median in the 2025 Restaurant Operations Data Abstract (2024 operations) is 65 percent of sales. The association says its figures are not standards or goals. A restaurant under 65 percent is not automatically fine, and a restaurant over it is not automatically failing. The mix of food, beverage, and service style moves the number.
TODO: Add a full-service prime cost median only from the association’s own table, with the sample note beside it. Do not cite a third-party 31.7 percent labor figure.
FAQ
Short answers to the questions this page is built to settle.
What is in the 13,700 of labor?
Wages, payroll taxes, and benefits for the illustration. If your weekly sheet is wages only, your percentage is not comparable to this one.
Where is the full-service prime cost median?
The free 2025 abstract used here does not publish a full-service prime cost median. This page leaves it blank rather than repeat a figure from a secondary blog.
Related
Tools and guides that use the same numbers.
Guide What is a good food cost percentage? A useful food cost percentage is the one you can tie to a count, not a number borrowed from another dining room. The National Restaurant Association's 2024 median for food and nonalcoholic beverages was 32.4 percent of sales at limited-service restaurants and 32.0 percent at full-service restaurants, and the association says those medians are not targets.