Free restaurant calculator
Restaurant labor cost percentage calculator
Free to use. Nothing you type leaves your browser. Figures checked against official sources on October 1, 2026. Estimates only, not legal or tax advice.
Enter your numbers
After comps and discounts, before sales tax and tips.
Include overtime and tip make-up pay.
Managers, chefs and any working owner on payroll.
Social Security, Medicare, unemployment, PFML employer share.
Health insurance, workers' compensation, paid leave, staff meals.
Result
Enter sales and at least one labor cost to see your percentage.
The formula
- Total labor cost = hourly wages + salaries + employer payroll taxes + benefits and other labor costs
- Labor cost percentage = total labor cost ÷ net sales × 100
How to read the result
The National Restaurant Association's 2025 Restaurant Operations Data Abstract, built on 2024 figures from more than 900 operators, put the median for salaries and wages including benefits at 36.5% of sales for full-service restaurants and 31.7% for limited-service restaurants. In earlier editions those figures were about 33% and 28%.
A median is the middle of a survey, not a target. A fine-dining room with a large kitchen brigade and a counter-service lunch spot will sit far apart and both can be healthy. The number that tells you most is your own percentage for the same week last year, and how it moves with sales.
Use the same period for both numbers, and use net sales: after comps and discounts, before sales tax and tips. Tips paid to staff are not your labor cost. The make-up pay you owe when tips fall short of the minimum wage is.
Source: National Restaurant Association: restaurant labor costs (Restaurant Operations Data Abstract 2025) · Checked
Massachusetts rules
The rules behind the numbers
What is the Massachusetts minimum wage for restaurant workers in 2026?
$15.00 an hour, the rate in force since January 1, 2023. It applies statewide, to full-time and part-time staff alike. Tipped staff can be paid a lower $6.75 service rate only when strict conditions are met.
Full answer and official sourceDo Massachusetts restaurants have to pay overtime?
State law does not require it: the Massachusetts overtime statute excludes anyone employed in a restaurant. Federal law has no restaurant exemption, so a restaurant covered by the Fair Labor Standards Act still owes time and a half for hours over 40 in a workweek.
Full answer and official sourceIf I send someone home early on a slow night, what do I owe them?
If they were scheduled for three or more hours and arrived on time, you owe at least three hours of pay at no less than the $15.00 minimum wage, even if they worked only one. If you agreed in advance that their regular shifts are shorter than three hours, you pay only the hours worked.
Full answer and official sourceWhat is the 2026 PFML contribution rate, and who pays what?
For 2026 the total is 0.88% of eligible wages. With 25 or more covered individuals, the employer pays at least 0.42% and can withhold up to 0.46% from employees. With fewer than 25, the rate is 0.46%, and all of it can come from employees.
Full answer and official source
Rules checked against official sources on . General information, not legal or tax advice.
Common questions
What is a good labor cost percentage for a restaurant?
There is no single right number. The National Restaurant Association's latest survey put the median at 36.5% of sales for full-service restaurants and 31.7% for limited-service restaurants, counting wages, salaries and benefits. Compare your figure with your own past weeks before comparing it with anyone else's.
Does labor cost include payroll taxes and benefits?
It should. Employer payroll taxes, workers' compensation, health insurance and paid leave are costs of employing people, and the industry surveys count wages and benefits together. Leaving them out makes your percentage look a few points better than it is.
Should salaried managers be counted in labor cost?
Yes. Count every person on payroll, including salaried managers and any owner who takes a wage for working in the restaurant. If you want to manage the schedule, track hourly labor on its own as a second number.
How do I lower labor cost without breaking wage rules?
Schedule to a sales forecast, stagger start times and cross-train. In Massachusetts, sending someone home early from a shift of three hours or more still costs three hours at minimum wage, and unpaid breaks only count if the employee was fully relieved of duties.
Your restaurant remains the employer of record and approves payroll and employment decisions. BOHO is not a PEO, a staffing agency, or legal counsel. A calculator gives an estimate from the numbers you enter. Confirm anything that affects pay or taxes with your payroll provider, attorney or tax adviser.
Want these numbers checked every pay cycle?
Your restaurant remains the employer of record and approves payroll and employment decisions. BOHO is not a PEO, a staffing agency, or legal counsel.