Your restaurant's at 3 PM yesterday, revenue looking solid at €2,800, but you've got that nagging feeling something's off with your costs. Prime cost - your food and labor expenses combined - typically runs 55-65% of revenue. Most owners check this monthly, but that's like checking your bank account once a year.
What exactly is prime cost?
Prime cost breaks down into two major pieces:
- Food cost: every ingredient and beverage that goes out
- Labor cost: wages, social contributions, temp staff - the whole payroll picture
Combined, these should hit 55-65% of your total revenue. Go higher and you're eating your own profits.
💡 Example daily prime cost:
Yesterday you did €2,800 in revenue with:
- Food cost: €980 (35%)
- Labor cost: €700 (25%)
Prime cost: €1,680 = 60% of revenue
The daily calculation
You need three numbers, that's it:
- Yesterday's revenue: straight from your POS
- Yesterday's food cost: purchases plus inventory you burned through
- Yesterday's labor cost: everyone who worked that shift
Here's your formula:
Prime cost % = ((Food cost + Labor cost) / Revenue) × 100
💡 Practical calculation example:
Tuesday, February 25:
- Revenue: €3,200
- Purchases plus inventory used: €1,120
- Personnel costs: €960
Calculation: (€1,120 + €960) / €3,200 × 100 = 65%
That's pushing the limit - time to dig deeper.
Estimating food cost daily
Skip the full inventory count. Try these shortcuts:
- Yesterday's purchases: tally up those receipts
- Inventory burned: estimate based on what actually left the kitchen
- Quick estimate: use 30-35% of revenue when you're in a rush
⚠️ Note:
Big delivery days will spike your food cost - that's normal since you're stocking up. Check your weekly average instead of panicking over one day.
Calculating labor cost daily
Personnel costs are more straightforward:
- Salaried staff: monthly salary ÷ working days
- Hourly staff: hours × rate × 1.3 (covers social contributions)
- Temp staff: whatever the agency invoiced you
I've seen restaurants miss this calculation entirely - a mistake that costs the average restaurant EUR 200-400 per month in unnoticed labor overruns. But tracking daily catches these spikes before they become expensive habits.
💡 Example personnel costs:
Yesterday's team:
- Chef (full-time): €180/day
- Cook (flexible): 8 hours × €16 × 1.3 = €166
- Service (2x): €280 total
Total labor cost: €626
Warning signs to watch for
These percentages scream "fix this now":
- Prime cost above 65%: you're bleeding money
- Food cost above 35%: portion control or supplier issues
- Labor cost above 30%: overstaffed or underperforming sales
Always compare Tuesday to last Tuesday. Weekday patterns matter more than random day-to-day swings.
Digital tools
Apps like KitchenNmbrs can crunch these numbers automatically using your recipes and schedules. Saves time and cuts down on math errors.
But honestly? A notebook and 10 minutes each morning works fine too. The habit matters more than having perfect precision.
Calculate prime cost daily in 5 minutes
Gather yesterday's revenue
Check your POS system or daily report for yesterday's total revenue. Note: use revenue excluding VAT for the most accurate calculation.
Calculate yesterday's food cost
Add up all purchases from yesterday (supplier receipts). Estimate what you used from inventory based on dishes sold. Rule of thumb: 30-35% of revenue.
Calculate yesterday's labor cost
Full-time staff: monthly salary divided by working days. Flexible staff: hours × hourly rate × 1.3. Add everything up for total personnel costs from yesterday.
Calculate prime cost percentage
Formula: (Food cost + Labor cost) / Revenue × 100. Note the percentage and compare with last week. Above 65% means taking action.
Analyze and adjust
Food cost too high? Check portion sizes and purchases. Labor cost too high? Review staffing versus revenue. Make adjustments for today.
✨ Pro tip
Calculate your prime cost at the exact same time each day - say 10 AM sharp. Set a phone reminder for the first two weeks until it becomes automatic muscle memory.
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 I really have to calculate my prime cost every day?
Daily gives you the tightest control, but even 3 times weekly beats monthly-only tracking. Start with twice a week and work up to daily once it becomes routine.
What if my prime cost hits above 65%?
Check if it's a one-off spike from big deliveries or extra staffing first. If it's happening regularly, you need to cut food costs through better portioning or raise prices, and optimize your staffing levels.
How do I estimate food cost without weighing everything?
Count dishes sold from your POS, multiply by estimated cost per dish. Or just use 30-35% of revenue as a ballpark figure for quick checks.
Should I include social contributions in labor cost calculations?
Absolutely - they're real costs. For salaried staff, it's already baked into their monthly pay. For hourly workers, multiply their rate by 1.3 to cover contributions.
📚 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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