Labor costs when working with

Quick answer

Running a restaurant with both permanent staff and temp workers creates a complex cost calculation that trips up most operators. You can't just compare hourly rates - the real numbers tell a completely different story.

Running a restaurant with both permanent staff and temp workers creates a complex cost calculation that trips up most operators. You can't just compare hourly rates - the real numbers tell a completely different story. Smart operators who master this calculation typically save 15-20% on their total labor spend.

Why mixed staffing complicates your cost calculations

You're juggling two totally different cost structures when you mix permanent and temporary workers. Your own staff carries hidden expenses that don't show up in their hourly wage - employer contributions, holiday pay, sick leave coverage. Temp workers look pricey upfront, but their costs are mostly transparent.

⚠️ Watch out:

Don't compare gross hourly wages with temp agency rates. The real costs tell a different story entirely.

Calculate true costs for permanent employees

For your own team members, you need to factor in:

Base wage: What appears on their paycheck
Employer contributions: Usually runs 25-30% of gross wages
Holiday allowance: 8% of annual gross pay
Time off costs: Sick days, vacation, personal leave
Development expenses: Training programs, certifications

? Real example - permanent chef:

Line cook earning €16 hourly:

Base wage: €16.00
Employer contributions (27%): €4.32
Holiday pay allocation: €1.28
Leave coverage fund: €2.40

Actual cost: €24.00 per hour

Understanding temp worker expenses

Temp agencies quote all-inclusive rates that cover most standard costs. But additional expenses can sneak up on you:

Agency rate: The invoiced amount per hour
Service fees: Administrative charges that might be separate
Contract minimums: Penalties if you don't meet agreed hours
Onboarding time: Training new temps costs money

? Real example - temp chef:

Agency line cook:

Agency hourly rate: €22.50
Service charges: €0.50
Training overhead: €1.00

Total cost: €24.00 per hour

Blending both cost structures effectively

Smart labor cost tracking separates fixed from variable expenses. Permanent staff represent fixed costs - you pay them regardless of business volume. Temp workers are variable costs that scale with demand.

Mixed labor cost formula:

Labor percentage = ((Fixed staff costs + Variable temp costs) / Total revenue) × 100

? Restaurant breakdown:

Monthly sales: €50,000

Fixed costs (permanent team): €12,000
Variable costs (temp staff): €3,000
Combined labor expense: €15,000

Labor percentage: (€15,000 / €50,000) × 100 = 30%

Finding your optimal staff balance

From tracking this across dozens of restaurants, the sweet spot balances consistency with flexibility. Too many permanent staff creates crushing fixed costs during slow periods. Over-relying on temps sacrifices service quality and drives up variable expenses.

Core coverage: Permanent staff handle minimum operational needs
Demand spikes: Temps cover rush periods and events
Critical roles: Keep key positions like head chef permanently filled
Support functions: Use temps for prep work and cleaning tasks

⚠️ Watch out:

Factor in learning curves for new temps. A seasoned permanent employee often outproduces an unfamiliar temp worker, even at identical hourly costs.

How do you calculate labor costs with mixed staff? (step by step)

Calculate real costs of own staff

Add to the gross hourly wage: employer contributions (25-30%), holiday pay (8%), sick leave reserve, and other costs. This gives you the real costs per hour for own employees.

Determine total costs of temp workers

Take the hourly rate from the temp agency and add any administrative costs and onboarding/training costs. This is your real hourly rate for temp workers.

Split fixed and variable labor costs

Own staff are usually fixed costs (same every month), temp workers are variable costs (only during busy times). Add both together for your total monthly labor costs.

Calculate labor cost percentage

Divide your total labor costs by your monthly revenue and multiply by 100. This gives you the labor cost percentage for your correct mix of own and temp staff.

✨ Pro tip

Create a simple hourly cost comparison chart updated every 90 days. Include true costs for each permanent position and current temp rates. This 5-minute reference tool helps you make smart staffing decisions during busy shifts.

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Frequently asked questions

Do temp workers always cost more than permanent staff?

Not at all. While their hourly rates look higher, you avoid employer contributions, benefits, and paid time off. For seasonal or peak-hour roles, temps often cost less overall.

How frequently should I review my mixed labor costs?

Monthly reviews work for most operations. But if you're making major staffing changes or facing wage increases, recalculate immediately to avoid budget surprises.

What's a reasonable labor cost percentage for mixed staffing?

Most successful restaurants run 25-35% of revenue. Mixed staffing lets you stay flexible - lower fixed costs but potentially higher variable costs during peak times.

How does VAT affect temp worker expenses?

Temp costs include 21% VAT that you can reclaim as a business expense. Just remember to factor this into your cash flow planning since you'll pay it upfront.

What strategies reduce costs from constantly rotating temps?

Build relationships with agencies to get the same temps regularly. Training new people costs time and money, so familiar faces who know your systems save significant cash.

Should I track productivity differences between staff types?

Absolutely essential. Measure output per hour worked, not just hourly costs. Sometimes a more expensive permanent employee delivers better value through speed and consistency than cheaper temps.

ℹ️ This article was prepared based on official sources and professional expertise. While we strive for current and accurate information, the content may differ from the most recent regulations. Always consult the official authorities for binding standards.

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.

8 years kitchen manager at 1NUL8 Group Rotterdam

Expertise: food cost management HACCP kitchen management restaurant operations food safety compliance

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