About the Restaurant Prime Cost Calculator
This restaurant prime cost calculator adds your two biggest controllable costs — cost of goods sold (food, beverage and packaging) and total labor — and shows them as a percentage of sales. Enter beginning inventory, purchases and ending inventory to get COGS the way your accountant does, then wages, salaries and payroll taxes and benefits for the same period. The result shows prime cost in dollars and percent, COGS and labor percentages separately, and how many dollars you are above or below your target.
Prime cost is the number many operators check every week or every pay period because it moves faster than rent, utilities and other fixed costs. It suits independent restaurants, bars, cafés and food trucks, as well as multi-unit managers comparing locations.
A prime cost at or below roughly 60% of total sales is a widely used benchmark for full-service restaurants, with quick-service concepts often running lower; the target input lets you use your own figure. Use the same period and the same sales base (food plus beverage) for every input.
With the default inputs, the prime cost percentage is 64.92%. Change any value above to recalculate instantly.
How to use the restaurant prime cost calculator
- 1Choose a period and enter total food and beverage sales.
- 2Enter beginning inventory, purchases and ending inventory to get COGS.
- 3Enter hourly wages, salaries and payroll taxes and benefits for the same period.
- 4Set your target prime cost percentage (60% is a common benchmark).
- 5Review the prime cost %, its COGS and labor components and the gap to target.
Formula and method
Cost of goods sold is the value of food, beverage and packaging actually used in the period: what was on the shelves at the start, plus what you bought, minus what is left at the end. Total labor includes hourly wages, salaried staff and the employer’s payroll taxes and benefits — the full cost of employing people, not just gross pay.
Prime cost is COGS plus labor, and dividing by total sales gives the prime cost percentage. The target line multiplies sales by your target percentage; the gap is how many dollars you are over or under it. Whatever is left after prime cost must cover rent, utilities, marketing, repairs and other overhead before any profit remains.
- COGS
- Cost of food, beverage and packaging used
- Labor
- Wages + salaries + payroll taxes and benefits
- Sales
- Total food and beverage sales for the period
Worked examples
Monthly full-service restaurant
COGS is $9,000 + $36,000 − $8,500 = $36,500 and labor $28,000 + $8,000 + $5,400 = $41,400, so prime cost is $77,900 — 64.92% of $120,000 sales and $5,900 above a 60% target. Labor at 34.5% is the bigger lever here.
Quick-service week
COGS of $9,700 plus labor of $9,600 gives $19,300, or 60.31% of $32,000. Against a 58% target ($18,560) the week ran $740 high.
Bar with low food cost
Beverage-heavy sales keep COGS at $19,000 (23.75%). With $22,600 of labor, prime cost is $41,600 — 52% of sales, $6,400 under a 60% target.
Frequently asked questions
What is prime cost in a restaurant?+
Prime cost is the total of cost of goods sold (food, beverage and packaging) and total labor cost, including payroll taxes and benefits. It is usually a restaurant’s largest expense group and the one managers can influence most week to week.
What is a good prime cost percentage?+
A common benchmark is a prime cost at or below about 60% of total sales for full-service restaurants. Quick-service restaurants often run in the mid-50s, while fine dining with expensive ingredients and large teams can run higher.
How often should I calculate prime cost?+
Many operators calculate it weekly or every pay period, using a physical inventory count, so problems with portioning, waste or overstaffing are caught before the month closes. Monthly calculations work but react more slowly.
Does prime cost include manager salaries and payroll taxes?+
Yes. Prime cost uses total labor: hourly wages, salaried managers and chefs, employer payroll taxes, workers’ compensation and benefits. Leaving out salaries or taxes makes prime cost look better than it really is.
How can I lower my prime cost?+
Tighten portioning, cost your recipes and re-price low-margin items, cut waste, renegotiate supplier prices, and schedule staff to forecast sales. Menu engineering helps push high-margin items, and every point saved drops straight to profit.