Restaurant Labor Cost Calculator: How to Calculate and Control Labor Cost %
By the HospitalityStack editors · written from hotel & resort F&B experience
Use the calculator
Enter net sales, hourly hours, average wage, payroll burden (taxes and benefits %) and salaried pay for the same period. The calculator shows labor cost %, your budget at a target %, and how many hourly hours that budget covers. Nothing is sent or saved — it runs in your browser. You can also open the standalone tool at /tools/labor-cost-calculator/.
Labor cost: 34.4% of sales
Total labor $6,876 (hourly incl. burden $5,376 + salaried $1,500) on $20,000 in sales.
At your 30% target, the labor budget is $6,000: you're $876 over. That budget covers about 251 hourly hours at this wage and burden.
The formula
Labor cost % = total labor cost ÷ net sales × 100.
Total labor cost = (hourly hours × average wage × (1 + burden %)) + salaried / management pay for the same period.
Use the same window for both sides: a week of labor against that week’s net sales. Tips guests pay to staff are not your wage cost — leave them out. If you pay a tip-credit wage, use the cash wage you actually pay.
What counts as labor
Count hourly wages, overtime, employer payroll taxes, workers’ comp, benefits and management salaries. Do not count guest-paid tips. Be consistent week to week or the trend is meaningless. Burden varies by state and by business; plug in your own payroll figures rather than a national average.
Set a target from your own numbers
There is no single “right” percentage. It depends on service style, menu and wage rates. Pull the last 8–12 weeks from payroll and POS, find the weeks that were both well run and profitable, and use their labor % as your target. The calculator then turns that target into an hour budget for the next schedule.
Controlling it week to week
Schedule to forecast sales by daypart, not by habit. Watch hours as the week goes, not only at payroll. Cut or extend shifts against live sales. Tools such as 7shifts, Homebase, When I Work and Harri pull or compare labor to sales so you can see projected labor % before you publish. Browse Scheduling & Staffing, or read how to build a restaurant staff schedule and best restaurant scheduling software (2026).