Restaurant prime cost calculator
Prime cost is the two lines you can move: what you paid for product and what you paid people. Put in a period's numbers and see where you land. Free, no signup, nothing stored.
Food and beverage for the period, counts included.
Hourly, salaried, and management.
Leave blank if you have none to add.
Everything you rang up, food and drink.
Total labor
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Prime cost
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Prime cost percentage
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Enter COGS, wages, and sales above zero.
The formula
Prime cost % = (COGS + Total labor including payroll taxes and benefits) ÷ Total sales
COGS is food and beverage cost for the period, worked out the same way as on the food cost calculator: beginning inventory plus purchases minus ending inventory. Labor is everything payroll costs you, not just the hours on the schedule.
The structure comes from the Uniform System of Accounts for Restaurants, the industry's standard chart of accounts. It formats the P&L so prime cost and controllable profit sit near the top, because those are the lines an operator can still do something about after the rent is signed.
A worked example
A month at $86,000 in total sales. Cost of goods sold came to $27,500. Wages and salaries were $24,600, and payroll taxes plus benefits added $4,900.
Labor = 24,600 + 4,900 = $29,500
Prime cost = 27,500 + 29,500 = $57,000
Prime cost % = 57,000 ÷ 86,000 = 66.3%
Run it without the $4,900 of taxes and benefits and you get 60.6%, which looks like a healthy restaurant. That 5.7-point difference is money that genuinely left the bank account, and it’s the most common reason an operator’s prime cost looks better on a napkin than in the year-end books.
About that 55-60% benchmark
You’ll see “keep prime cost under 60%” on every restaurant blog, ours included until we went looking for the source. We came up empty. The figure gets passed between software vendors and trade sites that cite each other, and we could not find an association or a textbook that states it as a standard.
The published numbers are thinner and less flattering. For 2024 the National Restaurant Association reported median food and non-alcohol beverage cost of 32.0% of sales for full-service and 32.4% for limited-service, and median labor including benefits of 36.5% and 31.7% respectively. Add each pair and you get about 68.5% for full-service and 64.1% for limited-service. The NRA doesn’t label those sums “prime cost,” and we’re doing the addition ourselves, so treat them as a cross-check rather than an official figure.
The same data does show the gap that matters. Operators the NRA classes as profitable held labor to 34.2% in full-service and 30.0% in limited-service, which lands them around 66% and 62%. So 60% is a stretch goal drawn from strong operators, not a line the median restaurant is clearing. If you’re at 65% and profitable, you’re in normal company. If you’re at 72%, the arithmetic has stopped working and the fix is usually price, not effort.
Where the number goes wrong
- Counting wages only. Payroll taxes, workers’ comp, and any benefits are part of labor, and leaving them out is worth several points, as the example above shows.
- Letting purchases stand in for COGS. Without an opening and closing count, a heavy buying week reads as a bad month and a light one reads as a good month. Neither is true.
- Using one benchmark for every format. A full-service kitchen and a counter-service café have different labor shapes. Compare yourself to your own trailing periods first and to a segment median second.
- Checking it quarterly. By the time a quarter closes, the schedule that caused the problem is twelve weeks old. This is a weekly or per-period number.
Questions we get
What is prime cost in a restaurant?
Cost of goods sold plus total labor, divided by total sales. It bundles the two costs you can actually move week to week, which is why the restaurant industry's own chart of accounts puts it on the first page of the P&L.
Is 60% really the target?
It's the number the industry repeats, and it's worth aiming at, but no association or textbook we could find publishes it as an official standard. The NRA's separately reported 2024 medians for food and labor add up to roughly 64% for limited-service and 68% for full-service, so the median restaurant isn't hitting 60%.
Does labor include payroll taxes and benefits?
Yes. Wages alone will understate prime cost by several points. The Uniform System of Accounts for Restaurants bundles wages, payroll taxes, and benefits together for exactly this reason, and the calculator gives that piece its own field so it's hard to forget.
Should manager salaries be in there?
Yes, along with anything you pay yourself out of payroll. Prime cost is meant to capture the full cost of the people who make and sell the product, not just the hourly crew.
My prime cost is 70%. What now?
Look at which half is heavy before touching anything. Menu prices and portion control move the COGS side; scheduling against real sales-per-hour moves the labor side. Cutting both at once usually costs you a good employee and a regular.
Other free calculators
- Food cost calculator — Period food cost from your two counts and your invoices, plus plate cost for a single item.
- Recipe cost calculator — Ingredient rows with yield adjustment, cost per portion, and the price that hits your target.
- ShelfCount pricing — one plan, $50 a month, every feature included.
Sources
- National Restaurant Association, “Elevated labor costs had a significant impact on restaurant profitability in 2024” (published October 2025)
- National Restaurant Association, “Restaurant operators kept food cost ratios in check in 2024” (published September 2025)
- Uniform System of Accounts for Restaurants (National Restaurant Association Educational Foundation) — a paid publication; summarised structure via RestaurantOwner.com
Written by the ShelfCount team. We run Stella Coffee in Los Angeles and built these for our own back office first. Last checked August 2026.
ShelfCount keeps the COGS half of this current on its own, from your counts and your invoices, so prime cost is a number you check rather than a project you schedule.