A chef recently discovered his signature duck confit was actually losing money despite a 28% food cost. The 90-minute prep time pushed total costs to 82%, making it unsustainable. Here's how to calculate labor costs for any dish you're considering removing.
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%
Identifying removal candidates
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
One of the most common blind spots in kitchen management is underestimating how complex dishes affect your entire service flow, not just individual profitability.
⚠️ 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
Food cost management systems immediately show you the total cost price of each dish, including labor estimates. 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
Track your 4 most labor-intensive dishes for exactly 2 weeks during peak service. You'll discover hidden time drains that don't show up in casual observations.
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 labor costs for every dish?
What if my total cost price exceeds 70%?
What about dishes that can be prepared in advance?
Can I estimate labor costs instead of measuring?
How do I handle dishes with shared prep work?
Should I count training time for complex dishes?
What's an acceptable labor cost percentage per dish?
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
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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