Restaurant prime cost calculator.
Food cost + labor cost as a % of revenue. The single most-watched number in restaurant operations. Target: under 60%.
Period totals
Use a full week or month. Defaults assume a small café.
Prime cost ratio
How this calculator works (same formula nouz uses)
Prime cost rolls your two largest expenses — food and labor — into a single ratio against revenue. Operators watch it weekly because it moves before your profit does: you will usually see prime cost drift two weeks before it shows up in the monthly P&L. That early warning is the whole point.
Prime cost = food cost + labor costPrime cost % = prime cost ÷ revenue
Rent, utilities, and insurance are largely fixed — you cannot change them this week. Food and labor are the two costs you actually steer day to day, which is why bundling them into one figure gives you a single dial to watch. If prime cost is under control, the rest of the P&L almost always follows; if it is drifting, no amount of trimming smaller line items will save the month.
A worked example
Using the calculator's defaults for a small café period: €24.000 revenue, €7.800 food and beverage cost, €6.800 all-in labor.
- Food cost % = 7.800 ÷ 24.000 = 32,5%
- Labor cost % = 6.800 ÷ 24.000 = 28,3%
- Prime cost = 7.800 + 6.800 = €14.600
- Prime cost % = 14.600 ÷ 24.000 = 60,8%
At 60,8% this café is just over the line into the "attention needed" band — profitable, but worth a look at portioning and scheduling before it drifts higher.
What a healthy number looks like
The classic hospitality rule of thumb is to keep prime cost at or under 60% of revenue. Reading the bands:
| Prime cost % | Verdict |
|---|---|
| Under 55% | Exceptional — real pricing power, lean staffing, tight ordering |
| 55–60% | Healthy — normal for well-run independents |
| 60–65% | Attention needed — check portions, scheduling, waste |
| Over 65% | Emergency — prices too low, payroll too heavy, or COGS leaking |
The 60% line is a guide, not a law — a coffee-led café with almost no kitchen can run leaner, while a scratch kitchen with a full brigade will sit higher and still be healthy. What matters more than the exact figure is the trend: a prime cost creeping up week after week is a warning even if it is still under 60, and a stable ratio in the low 60s can be perfectly sustainable for the right format. Track your own line over time before you judge it against anyone else's.
Common mistakes
- Counting only wages as labor. Wages alone understate the true cost by a quarter to a third — add payroll taxes, social contributions, paid leave, training time, and your own hours.
- Measuring it once a month. Prime cost earns its keep as a weekly number; monthly is too late to fix the week you are in.
- Chasing one half only. Food and labor trade off — cheap convenience food cuts labor but lifts food cost, scratch cooking does the reverse. The total is what counts.
- Ignoring a slow leak. Theft, spoilage, and over-pouring show up as a creeping food cost that no menu change explains.
When to use it — and what's next
Hit this every week using a full week or month of numbers. If prime cost is high, the two halves point to different fixes: high food cost sends you to why your café isn't making money and to portion and waste control; high labor sends you to scheduling and pricing. Watching prime cost weekly instead of discovering it at year-end is exactly the habit nouz is built to make effortless for a small café.
Common questions
What is prime cost for a restaurant?
Prime cost combines your two biggest expenses, food and labor, into a single ratio against revenue. It is the leading indicator of whether the operation is profitable, and you will usually see prime cost drift two weeks before it shows up in your monthly P&L, which is why operators track it weekly.
What is a good prime cost percentage?
As a rule of thumb, under 55% is exceptional, 55-60% is healthy and normal for well-run independents, 60-65% needs attention to portion control and scheduling, and over 65% is an emergency where prices are too low, payroll is too heavy, or COGS is leaking through theft, spoilage, or over-pouring.
Why should labor cost include more than just wages?
Wages alone understate labor cost by roughly a quarter to a third. Include payroll taxes, social contributions, paid leave accrual, training time, and your own hours, because that is what it actually costs to staff the shop. Count less and you will believe you are more profitable than you are.
How do food cost and labor cost trade off against each other?
Cheap convenience food means high food cost but low labor since there is no prep, while made-from-scratch means low food cost but high labor from cooks and time. Prime cost normalizes both, so if you are high on one and low on the other, the combined ratio is what tells you whether the model works.
How often should I calculate prime cost?
Weekly, using a full week or month of numbers. A monthly check is too slow to act on the week you are in, and prime cost is valuable precisely because it moves before profit does. Many operators pull it every Monday for the prior week so a bad trend gets caught while it can still be corrected.
What should I do first if prime cost is over 65%?
Split it into its two halves and act on whichever is out of range. If food cost is the culprit, look at portioning, waste, over-pouring, and supplier prices. If labor is the culprit, look at scheduling against demand and whether prices have kept pace with wages. Fixing the wrong half wastes effort and leaves the ratio high.