Calculating labor costs per dish is crucial when deciding whether a complex dish is still profitable. Many restaurant owners only look at ingredient costs, but forget that some dishes cost much more kitchen work than others. In this article, you'll learn step-by-step how to calculate labor costs per dish and when removal makes sense.
Why labor costs per dish matter
You make a pasta aglio olio in 8 minutes. A beef wellington takes 45 minutes to prepare and cook. Both dishes cost kitchen labor, but not the same amount. If you only look at ingredient costs, you're missing a big part of the story.
💡 Example:
Two dishes with the same food cost of 30%:
- Pasta aglio olio: 8 minutes kitchen work
- Beef wellington: 45 minutes kitchen work
- Difference in labor costs: €6.75 per portion
The complex dish earns €6.75 less per portion.
The basic formula for labor costs per dish
You calculate labor costs per dish like this:
Labor costs = (Preparation time in minutes / 60) × Kitchen hourly wage
Your kitchen's hourly wage consists of more than just the base salary. Add up:
- Gross hourly wage chef/cook
- Employer contributions (approximately 25% of gross wage)
- Vacation pay, 13th month, bonuses
- Sick leave (average 4% of hours)
💡 Example hourly wage calculation:
Chef earning €18 gross per hour:
- Gross wage: €18.00
- Employer contributions (25%): €4.50
- Vacation pay/13th month: €2.00
- Sick leave adjustment: €1.00
Actual hourly wage: €25.50
Measuring preparation time: what counts?
Count all time needed specifically for this dish:
- Mise-en-place: Chopping, marinating, preparing
- Cooking/frying: Active time at the stove
- Plating: Plating, garnishing
- Extra tasks: Making sauces, grilling, flambéing
⚠️ Note:
Don't count general kitchen work like cleaning, tidying up, or waiting time. Only the time spent directly on this dish.
Total cost price: food cost + labor costs
The real cost price of a dish is:
Total cost price = Ingredient costs + Labor costs
For the total cost price as a percentage:
Total cost price % = (Total cost price / Selling price excl. VAT) × 100
💡 Complete example:
Beef wellington at €42.00 (incl. 9% VAT):
- Selling price excl. VAT: €38.53
- Ingredient costs: €11.50
- Preparation time: 45 minutes
- Kitchen hourly wage: €25.50
- Labor costs: (45/60) × €25.50 = €19.13
Total cost price: €11.50 + €19.13 = €30.63
Cost price %: (€30.63 / €38.53) × 100 = 79.5%
When is removal logical?
Consider removal if:
- Total cost price > 65%: Too little left over for other costs
- Labor costs > 30%: The dish requires too much kitchen work
- Low sales + high cost price: Double problem
- Kitchen stress: Complex dish slows down other orders
⚠️ Note:
Also look at popularity. A dish with 70% cost price that attracts many guests can still be valuable for your revenue.
Alternatives to removal
Before you remove a dish, try first:
- Raise the price: Can the market pay €5 more?
- Simplify the recipe: Less complex preparation
- Adjust the portion: Smaller portion, same price
- Optimize mise-en-place: Prepare during quiet moments
With a system like KitchenNmbrs, you immediately see the total cost price of each dish, including an estimate of labor costs. This way you make data-driven decisions about your menu.
How do you calculate labor costs per dish? (step by step)
Calculate your actual kitchen hourly wage
Add to the gross hourly wage: employer contributions (25%), vacation pay, 13th month, and sick leave. A chef earning €18/hour actually costs approximately €25.50 per hour.
Measure the preparation time exactly
Set a timer and measure all time needed specifically for this dish: mise-en-place, cooking, plating. Don't count general kitchen work or waiting time.
Calculate the labor costs
Use the formula: (Preparation time in minutes / 60) × Kitchen hourly wage. At 45 minutes and €25.50 hourly wage = €19.13 labor costs per portion.
Add ingredient and labor costs
Total cost price = Ingredient costs + Labor costs. Divide by your selling price excl. VAT and multiply by 100 for the percentage.
Compare with your profitability standard
If the total cost price exceeds 65%, you're probably not earning enough. Then consider a price increase, recipe adjustment, or removal.
✨ Pro tip
Measure the preparation time of your 3 most complex dishes for a week. You'll be surprised how much time some dishes actually take.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
Was this article helpful?
Frequently asked questions
Should I include labor costs for every dish?
For a complete picture yes, but focus first on your 5 most complex dishes. That's often where the biggest cost surprises are.
What if my total cost price exceeds 70%?
Then you're probably losing money on that dish. Raise the price, simplify the recipe, or remove it from the menu.
What about dishes that can be prepared in advance?
Count the full preparation time, even if you do it during quiet moments. That time still costs money and can't be used for other things.
Can I estimate labor costs instead of measuring?
You can, but you usually underestimate. Many dishes cost 20-30% more time than you think due to all the small tasks.
When is a high cost price still acceptable?
If the dish attracts many guests who also order other things, or if it sets your restaurant apart from competitors. Sometimes a signature dish is worth more than just the direct profit.
📚 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.
Plan your mise-en-place with cost overview
Good mise-en-place starts with knowing what you need and what it costs. KitchenNmbrs connects your recipes to order lists and inventory. Try it free for 14 days.
Start free trial →