Labor cost is often your biggest expense after food. Many restaurant owners think they need complex systems to track staffing costs effectively. But by monitoring daily what you spend on staff, you can quickly adjust if you've scheduled too many or too few people for the following week.
What is daily labor cost data?
Daily labor cost data tracks your actual wage expenses per day, including:
- Gross wages of all employees
- Employer contributions (approximately 25% on top of gross wage)
- Overtime and allowances
- Temporary and agency staff
You compare this data with your daily revenue to see if your labor costs stay proportional.
Calculate your labor cost percentage per day
The formula for labor cost percentage is:
Labor cost % = (Total wage costs / Revenue excl. VAT) × 100
💡 Example:
Monday at your restaurant:
- Revenue: €2,400 incl. VAT = €2,202 excl. VAT
- Wage costs: €720 (3 people × 8 hours × €30/hour incl. contributions)
Labor cost: (€720 / €2,202) × 100 = 32.7%
For restaurants, healthy labor costs range between 25-35% of revenue. Above 35% and it's tough to maintain profitability.
Analyze patterns by day of the week
Each day has its own rhythm. Create an overview for each day:
- Monday: Often quiet, fewer staff needed
- Tuesday-Thursday: Stable traffic, standard staffing
- Friday-Saturday: Busy periods, more staff but higher revenue too
- Sunday: Varies by concept (brunch vs. closed)
💡 Example weekly analysis:
Your labor cost per day last week:
- Monday: 45% (too high - overstaffed for low revenue)
- Tuesday: 28% (solid)
- Wednesday: 31% (solid)
- Thursday: 29% (solid)
- Friday: 26% (solid - high revenue)
- Saturday: 24% (excellent)
Conclusion: Too many staff scheduled on Monday
I've seen this mistake cost restaurants EUR 200-400 per month - consistently overstaffing slow days because owners don't track daily labor percentages.
Compare with revenue forecast for next week
Look at your expected revenue for next week. Pay attention to:
- Holidays or local events
- Weather forecasts (affects terrace seating)
- School holidays
- Reservations already confirmed
Calculate your maximum labor spend per day:
Max labor cost = Expected revenue × Desired labor cost %
⚠️ Note:
Always calculate with revenue excl. VAT. VAT goes to the tax authority and isn't real revenue for your calculations.
Adjust your staff schedule
Based on your analysis, you can make specific adjustments:
- High labor cost: Schedule fewer hours or use less expensive staff
- Low labor cost: Consider more service or extended opening hours
- Irregular patterns: Flexible contracts or temporary staff
💡 Practical example:
Adjustment for next week:
- Monday: 1 person fewer (from 3 to 2)
- Savings: 8 hours × €30 = €240
- New labor cost: €480 instead of €720
At same revenue: 21.8% instead of 32.7%
Consider service quality
Too few staff can create problems:
- Longer wait times for guests
- Stress for your team
- Order mistakes
- Negative reviews
Find the balance between costs and service. A labor cost of 28-32% with happy guests beats 20% with poor service.
Use digital tools for overview
Manually tracking labor cost data eats up time. With tools like KitchenNmbrs you can see directly:
- Your daily labor cost percentage
- Comparisons with previous weeks
- Forecasts for next week
- Which days deviate from your average
This helps you adjust faster without endless calculations.
How do you adjust staff scheduling with labor cost data?
Collect your daily data
Note each day your total wage costs (including employer contributions) and your revenue excl. VAT. Calculate your labor cost percentage per day.
Analyze patterns by weekday
See which days consistently score too high or too low. Pay attention to differences between Monday (often quiet) and weekends (usually busy).
Make a revenue forecast
Estimate your expected revenue for next week. Pay attention to holidays, weather and events. Calculate how much you can spend on staff per day at most.
Adjust your staff schedule
Adjust your rosters based on your analysis. Schedule fewer hours on days with high labor cost, but keep service quality in mind.
✨ Pro tip
Review last week's labor cost data every Monday at 9 AM and adjust the current week's schedule within 2 hours. This prevents months of overspending before you notice the pattern.
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
What's normal labor cost for a restaurant?
For restaurants, healthy labor costs run between 25-35% of revenue excl. VAT. Above 35% and profitability becomes difficult to maintain.
Should I include employer contributions in my labor cost?
Absolutely. Employer contributions are roughly 25% on top of gross wages and represent real costs for your business. Always calculate with the total amount you spend on staff.
How often should I adjust my staff schedule?
Review your labor cost data weekly and adjust your schedule for the following week as needed. With major deviations, you can also make mid-week adjustments.
What if my labor cost is high one day and low another?
That's normal. Focus on your weekly average. Mondays are often expensive (low revenue), weekends often cheaper (high revenue). As long as your weekly average stays under 35%, you're on track.
Can I send staff home if it's quieter than expected?
This depends on your employment contracts. With temporary staff it's often possible, with permanent contracts it's not easy. Plan flexibly with a mix of permanent and flexible staff.
Should I factor in prep time for labor cost calculations?
Yes, include all hours worked - prep, service, and cleanup. Many restaurants underestimate prep labor costs, which can add 15-20% to your actual daily labor expenses.
📚 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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