Free Tool
Prime cost is food cost plus labor cost — the two biggest, most controllable expenses in your restaurant, added together and measured against sales. It's the number that matters more than any other single metric, because it's where almost all of your controllable margin lives. Rent's fixed. Utilities barely move. But food and labor together usually run 55–70% of every dollar that comes in, and both are things you actually manage every shift — what you order, how you portion, who you schedule. Get prime cost right and you're profitable even in a bad month. Get it wrong and no amount of covers will save you. Punch in your numbers below and you'll have your prime cost, your verdict against industry benchmarks, and what it's actually costing you in real dollars — in under a minute.
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Total cost of the food and beverage you sold in the period — what you paid vendors, not menu price. Include comps and waste; exclude non-resale supplies (to-go containers, napkins).
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Include everything it costs you to have people on the clock: hourly wages, salaried pay, overtime, payroll taxes (FICA, FUTA, SUTA), workers' comp, and benefits you actually pay for (health insurance, PTO accrual, 401(k) match). Don't include costs you don't actually carry — if you don't offer benefits, don't estimate them in. If you only have "gross wages" from your POS, that's fine to start, but your real prime cost is higher than what you'll see — payroll taxes and workers' comp typically add 10–15% on top of gross wages.
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Gross sales for the period, before sales tax, including all channels (dine-in, takeout, delivery, catering).
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Enter your food cost, labor cost, and total sales above to see your prime cost, your verdict against industry benchmarks, and what it's costing you in real dollars.
Run it weekly if you're actively fixing something, monthly if you're just keeping score.
Prime cost has one formula and it doesn't need a spreadsheet:
Prime Cost ($) = Food & Beverage Cost + Total Labor Cost
Then turn it into a percentage of sales, because a $75,600 prime cost means nothing on its own — it depends entirely on how much you sold:
Prime Cost (%) = Prime Cost ($) ÷ Total Sales ($) × 100
Worked example — using the numbers most independent full-service restaurants would recognize:
| Food & beverage cost (month) | $36,000 |
| Total labor cost (month) | $39,600 |
| Prime cost ($) | $75,600 |
| Total sales (month) | $120,000 |
| Prime cost (%) | 63.0% |
| Food cost % | 30.0% |
| Labor cost % | 33.0% |
That restaurant is spending 63 cents of every sales dollar on food and labor before rent, utilities, insurance, marketing, repairs, or a single dollar of owner profit. That leaves 37 cents to cover everything else — which is workable, but thin. Get that number to 60% and you free up $3,600 a month without cutting a single item from the menu or firing anyone; it comes from tightening waste, portioning, and scheduling instead.
Benchmarks shift by concept and market, but these are the ranges to measure yourself against. If your concept doesn't map cleanly to one row, use the closest fit and lean toward the tighter end if you're aiming to grow margin.
| Concept | Food Cost % | Labor Cost % | Prime Cost Target |
|---|---|---|---|
| QSR / Fast-casual | 26–30% | 25–30% | 55–60% |
| Full-service (casual to upscale) | 28–32% | 28–35% | 60–65% |
| Bar-heavy / high-alcohol mix | 18–22% (pour cost) | 20–25% | 45–55% |
The rule of thumb: if you don't know your concept's exact target, 60% is the number to aim for. Below 60%, you have real breathing room for rent, marketing, and profit. Above 65%, no matter your concept, you're running too thin to absorb a bad month, an equipment breakdown, or a slow January.
Being over 65% isn't a death sentence, but it does mean this week — not next quarter — needs to include one of these three moves. Pick the one that matches where the number is actually coming from (your calculator output above tells you: high food cost % points you at #2, high labor cost % points you at #1).
Labor is the faster lever because you can change it this week, not after your next menu print run. Pull your sales-by-hour report and overlay it against your schedule — you're looking for shifts where labor is scheduled flat but sales are not (a common one: full crew scheduled through a dead 2–4pm window). Trim or split those shifts. For a restaurant doing $120K/month, cutting even 15 labor-hours a week at $20/hr fully loaded is roughly $1,300/month back — no menu changes, no layoffs, just matching staffing to actual demand.
Pull your last 30 days of item-level sales and rank by dollar margin contribution (quantity sold × (price − food cost)), not by how much you sell of it. You'll usually find 3–5 items eating disproportionate food cost — often a special, a shareable, or something with a protein portion nobody's adjusted since the vendor's last price increase. Reprice those specific items 5–8%, or tighten the portion by an ounce, before you touch anything else on the menu. Customers rarely notice a single-item price move; they do notice a menu-wide reprint.
Every extra protein, sauce, or specialty ingredient you carry is money sitting in the walk-in and a harder number to control. Get a second distributor to bid your top 10 SKUs by spend — even a 3–5% price improvement on your biggest line items moves the needle more than shaving pennies across 200 SKUs. At the same time, look for menu items sharing 80%+ of their ingredients with something else and consider dropping the redundant one — fewer SKUs means less waste, tighter counts, and a kitchen that's actually easier to run.
Do the math after each move using this same calculator. If you're still over 65% after all three, that's usually a pricing problem across the whole menu, not an operations one — worth a full margin review before you guess further.
This tool gets you 80% of the way there in five minutes. The other 20% — which specific items are dragging your food cost, which shifts are bleeding labor, whether your POS and payroll data even agree with each other — takes a real look at your data. Mise runs a free 30-minute margin review: bring your last month of sales, food cost, and labor numbers (or connect your POS — Square is live, Toast and the delivery platforms are rolling out), and you'll leave with the same kind of breakdown you just saw above, but built from your actual numbers instead of a placeholder.
No pitch deck. No commitment. Just your numbers and where the money's going.