Picture this: your food costs look great at 28%, but you're still bleeding money. Most restaurant owners track ingredient expenses while ignoring that staff wages typically consume 30-35% of revenue. Combining both metrics in a single daily dashboard reveals exactly where your profits vanish.
Why track food cost and labor cost together?
You might source the cheapest ingredients, but if your chef spends 3 hours preparing a dish you sell for €18, you're hemorrhaging money. Combining both expense categories reveals your actual profitability per dish and service period.
💡 Example:
Steak sold for €32.00 (excl. VAT €29.36):
- Ingredients: €9.50 (32% food cost)
- Labor (15 min at €20/hour): €5.00 (17%)
- Total: €14.50 (49% of revenue)
Combined: 49% - that leaves minimal room for other expenses and profit.
The 3 essential ratios for your dashboard
An effective dashboard displays these critical figures daily:
- Food cost %: Ingredients divided by revenue excl. VAT
- Labor cost %: Wage expenses divided by revenue excl. VAT
- Combined cost %: Food cost + labor cost together
Healthy ratios for restaurants typically fall around:
- Food cost: 28-35%
- Labor cost: 25-35%
- Combined: 55-65%
⚠️ Watch out:
If your combined cost exceeds 70%, you lack sufficient margin for rent, utilities, equipment depreciation and profit. Immediate adjustments become necessary.
Calculating labor cost per dish
For precise dashboard data, you'll need accurate timing for each dish. Here's a practical approach:
- Track prep time: Minutes of mise-en-place per portion?
- Track cooking time: Minutes during service execution?
- Calculate using total hourly wage: Gross wage + employer contributions (typically €18-25/hour)
💡 Example calculation:
Pasta carbonara:
- Prep: 5 minutes
- Cooking: 8 minutes
- Total: 13 minutes
- Hourly wage: €20
Labor cost: (13/60) × €20 = €4.33 per portion
Dashboard structure for daily monitoring
From analyzing actual purchasing data across different restaurant types, an effective dashboard presents this information in one clear overview:
- Yesterday: Food cost %, labor cost %, combined %
- This week: Running average of these figures
- Top 5 dishes: Most frequently sold + their combined costs
- Alerts: Dishes exceeding 65% combined cost
Review this each morning in 5 minutes. You'll instantly identify if yesterday was profitable and what requires attention today.
💡 Practical dashboard example:
Yesterday (Wednesday):
- Revenue: €2,400
- Food cost: €720 (30%)
- Labor cost: €840 (35%)
- Combined: €1,560 (65%)
Alert: Within acceptable range, but approaching upper limit. Verify all dishes maintain proper pricing.
Digital tools vs. manual calculation
You can track this manually through Excel, but that consumes significant time and invites errors. A system like KitchenNmbrs automatically calculates:
- Food cost per dish based on current purchase prices
- Labor cost per dish based on preparation time
- Combined percentages in real-time dashboard
- Alerts triggered by dishes becoming too expensive
This immediately reveals the impact of supplier price fluctuations or recipe modifications on your overall profitability.
How do you build a combined food cost-labor cost dashboard?
Measure labor time per dish
Note for your 10 best-selling dishes how many minutes of prep and cooking are needed. Calculate with an all-in hourly wage of €18-25 for your kitchen staff.
Calculate combined cost per dish
Add ingredient costs and labor cost together. Divide this by your selling price excl. VAT and multiply by 100 for the percentage. Aim for a maximum of 65% combined.
Set up daily monitoring
Check every morning your food cost %, labor cost % and combined cost % from yesterday. Compare with your target figures and identify dishes that have become too expensive.
✨ Pro tip
Track your combined costs on weekend services specifically - Friday and Saturday nights often show the highest labor percentages due to complex orders and rush periods. Monitor these 2 days weekly to catch profit leaks early.
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
Should I include employer contributions in my labor cost calculation?
Always calculate using the complete hourly wage including employer contributions. This typically adds 30-40% above gross wages, so €15 gross becomes €20-21 all-in.
How often should I update my labor time per dish?
Review every 3 months or after recipe modifications. As your chef becomes more efficient or you streamline processes, your per-dish labor costs decrease.
What if my combined cost exceeds 70%?
You lack adequate margin for other expenses and profit. First verify your labor timing is realistic, then either raise prices or modify recipes to reduce food costs.
Can I use different hourly wages for various dish types?
Absolutely. Complex dishes prepared by head chefs can use higher hourly rates than simple dishes made by commis staff. Use averages of €18-25 per skill level.
How do I calculate labor cost for mise-en-place used across multiple dishes?
Divide prep time by the typical portion count you produce from it. Example: 30 minutes sauce preparation for 20 portions equals 1.5 minutes per portion.
What happens if my food costs suddenly spike but labor stays constant?
Your combined percentage will jump, signaling supplier price increases or portion control issues. Check recent invoices and verify kitchen staff aren't over-portioning ingredients.
Should I track combined costs differently for lunch versus dinner service?
Yes, dinner typically involves more complex preparations and higher labor costs. Split your dashboard to show lunch and dinner ratios separately for better accuracy.
📚 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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