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.
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 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.
📚 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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