You're staring at last month's numbers - €16,000 in staff costs against €45,000 revenue - wondering if this is even sustainable. Labor cost benchmarks by restaurant type give you a reality check on your personnel expenses compared to similar operations. Too many restaurant owners fly blind on staffing costs until cash flow problems force an uncomfortable reckoning.
What are labor cost benchmarks?
Labor cost benchmarks reveal the typical percentage of revenue that restaurants like yours spend on personnel. Think of them as your financial GPS - they show you if you're heading in the right direction or veering into dangerous territory.
💡 Example:
Bistro with €40,000 monthly revenue:
- Personnel costs: €14,000
- Labor cost: (€14,000 / €40,000) × 100 = 35%
- Bistro benchmark: 30-38%
Conclusion: You're in the safe zone
Benchmarks by restaurant type
Service intensity drives everything here. A fast-casual spot runs lean while fine dining needs bodies on the floor:
- Fast casual / takeaway: 25-32% of revenue
- Bistro / brasserie: 30-38% of revenue
- Casual dining: 32-40% of revenue
- Fine dining: 35-45% of revenue
- Café with food: 28-35% of revenue
- Delivery / dark kitchen: 20-28% of revenue
⚠️ Note:
These numbers aren't gospel. Your rent, location, and concept all matter. But they'll stop you from operating completely in the dark.
How do you calculate your own labor cost?
Include everything - and I mean everything. After managing kitchen operations for nearly a decade, I've watched owners get blindsided by "hidden" costs they conveniently forgot to count.
- Gross wages: Every single employee including you
- Employer contributions: Social premiums, pension contributions
- Other costs: Uniforms, training, agency staff
- Your own wage: Yes, you count too
💡 Example calculation:
Restaurant with €50,000 monthly revenue:
- Chef: €3,500 gross + €700 employer contributions = €4,200
- Service staff: €2,800 gross + €560 employer contributions = €3,360
- Owner: €3,000 (your wage)
- Temporary staff: €800
- Other: €200
Total: €11,560 = 23.1% of revenue
What do the results mean?
Numbers tell stories. Here's how to read yours:
Running hot (above benchmark):
- Overstaffed for your revenue level
- Scheduling chaos - people standing around during slow periods
- Wages that don't match productivity
- Not enough covers per team member
Running lean (below benchmark):
- Might be cutting corners on service quality
- Paying yourself peanuts (unsustainable)
- Missing some cost categories in your calculation
💡 Example analysis:
Casual dining restaurant, benchmark 32-40%:
- Your labor cost: 45%
- Conclusion: Bleeding money
- Possible causes: Too many staff, empty tables
- Action: Match your roster to actual customer flow
Season and circumstances matter
Benchmarks assume normal trading conditions. Real life isn't that neat:
- Slow months: Labor cost jumps 5-10% higher
- Peak season: Can drop 5-10% with good planning
- First year: Expect higher costs while training new team
- Expensive areas: Higher wages push up percentages
Actions based on benchmark
Don't panic if you're off target. Use the gap as a starting point for investigation:
If you're above benchmark:
- Calculate revenue per employee per shift
- Match schedules to actual busy periods
- Streamline processes to reduce labor needs
- Train staff to handle multiple roles
If you're below benchmark:
- Double-check you've counted all costs
- Ask yourself: is service suffering?
- Pay yourself what you'd pay a manager
⚠️ Note:
Cutting staff looks great on paper until customers start complaining about slow service. You'll lose more in revenue than you save in wages.
Setting up monthly evaluation
Make this part of your monthly financial ritual:
- Run your labor cost percentage every single month
- Compare to last month and same month last year
- Spot trends early - is it creeping up consistently?
- Track revenue per employee - more sales with same staff is gold
Good restaurant management software keeps your P&L organized so you can spot labor cost trends before they become cash flow disasters.
How do you use labor cost benchmarks? (step by step)
Calculate your total personnel costs
Add up all personnel costs: gross wages, employer contributions, temporary staff, your own wage, and other personnel costs such as work clothing. Use a full month as your basis.
Determine your revenue from the same period
Take the revenue from the same month as your personnel costs. Calculate with revenue including VAT (as shown on your cash register). Make sure the period matches exactly.
Calculate your labor cost percentage
Divide your total personnel costs by your revenue and multiply by 100. Formula: (Personnel costs / Revenue) × 100 = Labor cost %.
Compare with benchmark for your restaurant type
Look up the benchmark for your type of restaurant and compare. Note: benchmarks are guidelines, not absolute truths. See if you fall within, above, or below the range.
Analyze deviations and determine actions
If you significantly deviate from the benchmark, look for causes. Too high may indicate overstaffing or inefficiency. Too low may mean you're missing costs or have too few staff.
✨ Pro tip
Track your labor cost against revenue per server during your peak Friday and Saturday dinner services over 8 consecutive weekends. This pattern reveals your true efficiency when it matters most.
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 my own wage as owner in the labor cost?
Absolutely yes. You're doing work that has real value - if you weren't there, you'd need to pay someone else to do it. Skip this and your numbers become meaningless compared to other restaurants.
What if my labor cost is higher than the benchmark?
Don't panic and start firing people immediately. Maybe you've chosen higher staffing for better service, which could justify the extra cost. Dig into the why before making changes that might hurt your operation.
How often should I check my labor cost?
Monthly calculations, but look for patterns over 3-6 months. One bad month could be due to staff illness, holiday scheduling, or seasonal dips. Trends over time tell the real story.
Are employer contributions already included in the benchmarks?
Yes, these benchmarks assume you're counting total personnel costs including social contributions, insurance, and benefits. Count only gross wages and you'll be comparing apples to oranges - your costs will look artificially low.
📚 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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