Prime cost calculator
Enter your food and beverage cost, your labor cost, and net sales for the same period. You get the three percentages and whether you are in the healthy range.
An estimation aid only — results are not financial, accounting or legal advice.
How is it calculated?
- Food cost % = food cost ÷ net sales.
- Labor cost % = labor cost ÷ net sales.
- Prime cost = food + labor, and its % = the two combined ÷ net sales.
- Rule of thumb: aim for a prime cost of 60% of sales or less.
Frequently asked questions
What is prime cost?
It is food and beverage cost plus labor cost, expressed as a percentage of net sales. It is the most important metric because these are the two largest expenses management can control.
What is a good ratio?
Most successful restaurants keep prime cost at 60% of sales or below. Full-service restaurants may run up to 65%.
How do I lower prime cost?
Cut waste and inventory shrinkage, review supplier prices, tune portion sizes, and match labor scheduling to real peak hours.
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