Business

Labor Cost Percentage Calculator

Labour as a share of sales, and the hours you can afford.

Enter your values

ⓘ Live results

Results
Labour cost percentage
31.4%
Total labour cost
$21,350.00
Verdict
Over target by 3.4%
Labour budget at target
$19,040.00
Over/under budget
$2,310.00
Hours affordable at target
892 h
Sales per labour dollar
$3.19

Quick answer

Labour cost percentage = total labour cost ÷ sales × 100, where labour cost includes wages, payroll taxes and benefits, not just hourly pay.

Labour % = total labour cost ÷ sales × 100

How to use the Labor Cost Percentage Calculator

  1. 1Enter sales for the period you are measuring.
  2. 2Enter wages paid and the payroll burden percentage.
  3. 3Set your target labour percentage for the sector.

Worked example

Using the values the calculator loads with:

Inputs

  • Sales for the period68000 $
  • Wages paid17500 $
  • Payroll taxes and benefits22 % of wages
  • Target labour percentage28 %
  • Average hourly rate17.50 $

Results

  • Labour cost percentage31.4%
  • Total labour cost$21,350.00
  • VerdictOver target by 3.4%
  • Labour budget at target$19,040.00
  • Over/under budget$2,310.00
  • Hours affordable at target892 h
  • Sales per labour dollar$3.19

Frequently asked questions

What labour percentage should a restaurant run?

Quick service typically 25–30%, full service 30–35%, and fine dining up to 40%. Add food cost and the combined prime cost should stay under 60–65%.

Should owner pay be included?

Include a market-rate wage for any owner working in the business, otherwise the number understates the true cost of running it.

About this calculator

Results are estimates for general information. For medical, legal, structural or financial decisions, confirm with a qualified professional.