Free staff drinks cost money, even if you don't charge for them. Many hospitality entrepreneurs forget to include these costs in their beverage cost, which means their actual drink margins are lower than they think. Your P&L tells a different story than you realize.
Why include staff drinks in your calculation?
Every free coffee, cola or beer for your team costs you money. These costs don't disappear just because you don't charge guests for them. They absolutely impact your margin.
⚠️ Important:
Many entrepreneurs think: "It costs me nothing, because I give it away for free." But you did buy that coffee or cola. Those purchase costs need to be covered somewhere.
If you don't include these costs, your beverage cost looks lower than it actually is. This leads to wrong decisions about pricing and purchasing.
How do you calculate the real costs?
There are two ways to include staff drinks in your cost calculation:
- Method 1: Count them as a separate cost line
- Method 2: Increase your beverage cost percentage
💡 Example method 1:
Restaurant with 4 staff members, each 2 coffees per day:
- Coffee per cup: €0.25
- Per day: 8 cups × €0.25 = €2.00
- Per month: €2.00 × 30 = €60.00
Extra cost line: €60 per month
With method 2, you include staff drinks in your total beverage purchases. This raises your beverage cost percentage, but gives you a more realistic picture of your actual margin.
Which drinks should you include?
Include all drinks you give free to staff:
- Coffee and tea during shifts
- Soft drinks and water
- Staff beer after shift
- Tastings of new drinks
- Drinks during staff meal
💡 Practical example:
Café with 6 staff members, monthly staff drinks:
- Coffee/tea: 180 cups × €0.25 = €45
- Cola/soft drinks: 60 glasses × €0.40 = €24
- Beer after shift: 24 units × €1.20 = €29
Total: €98 per month on staff drinks
Impact on your beverage cost percentage
Staff drinks can increase your beverage cost by 2-5 percentage points. That sounds small, but on an annual basis this can add up to hundreds of euros.
Formula for actual beverage cost:
Actual beverage cost % = (Beverage purchases + Staff drinks) / Beverage sales × 100
💡 Calculation example:
Café with €8,000 beverage sales per month:
- Beverage purchases for sales: €1,600
- Staff drinks: €100
- Total beverage costs: €1,700
Beverage cost without staff: €1,600 / €8,000 = 20%
Actual beverage cost: €1,700 / €8,000 = 21.3%
Based on real restaurant P&L data, this 1-2% difference often explains why beverage margins seem healthy on paper but cash flow tells another story.
How do you keep track of it?
The most important thing is that you consistently track what your team drinks. You can do this in different ways:
- Daily count: Note every coffee and cola
- Weekly estimate: Count one week precisely, calculate forward to the month
- Fixed allowance: Give each team member a fixed drink budget
⚠️ Important:
Daily counting is most accurate, but takes time. Weekly estimating gives a good picture and is more practical for most businesses.
A food cost calculator like KitchenNmbrs lets you enter staff drinks as a separate cost line, so you automatically see your actual beverage cost.
Alternatives to free drinks
Some entrepreneurs choose to handle staff drinks differently:
- Drink budget: Each team member gets €20/month drink allowance
- Limited choice: Only coffee/tea free, rest at cost price
- Shift drink: One free drink per shift
- Staff discount: 50% discount on all drinks
The advantage of these systems is that you know exactly what it costs and can budget more easily.
How do you include staff drinks in your beverage cost? (step by step)
Count precisely for one week what your team drinks
Note every coffee, cola, beer you give away for free. Calculate this to monthly costs by multiplying by 4.3.
Calculate the purchase costs of these drinks
Multiply the quantity by your purchase price per unit. For example: 180 coffees × €0.25 = €45 per month.
Add these costs to your beverage purchases
Add the staff drinks to your monthly beverage purchases. Then calculate your actual beverage cost: (beverage purchases + staff drinks) / beverage sales × 100.
✨ Pro tip
Track staff drinks for exactly 14 days during your busiest period to get an accurate baseline. Most restaurants underestimate their actual consumption by 30-40%.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
Do I have to pay VAT on free staff drinks?
No, you don't pay VAT on free staff drinks. You did pay VAT when purchasing, but you can deduct that normally like all other business costs.
How much do staff drinks cost on average per month?
For an average restaurant with 5-6 staff members, this is between €60-120 per month, depending on what you offer. Coffee and tea are cheapest, beer and soft drinks more expensive.
Can I deduct staff drinks as business costs?
Yes, staff drinks during working hours are fully deductible as business costs. They fall under personnel costs and working conditions.
Should I also include tastings of new drinks?
Yes, tastings also cost money. Include them in your staff drinks or create a separate cost line under 'product development'.
How do I prevent staff drinks from getting out of hand?
Set clear rules: for example maximum 2 coffees per shift, or a fixed drink budget per staff member per month. Communicate this clearly with your team.
What's the difference between tracking staff drinks daily versus weekly?
Daily tracking gives you exact numbers but requires constant attention from management. Weekly sampling is 85-90% accurate and much more practical for busy restaurant operations.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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