Independent restaurants in the Netherlands typically see overhead costs eat up 25-35% of their revenue. These fixed expenses don't care if you're packed or empty - they hit your bottom line either way. Too many owners think they're turning a profit when they're actually bleeding money because they haven't calculated these costs properly.
What exactly are overhead costs?
Overhead costs are your monthly fixed expenses that stick around no matter how many customers walk through your door. They're completely separate from what you spend on food or staff wages.
- Rent and mortgage: Your biggest monthly hit
- Insurance: Liability, inventory, building coverage
- Energy: Gas, water, electricity (the baseline amount)
- Phone and internet: Communication systems and POS
- Accountant and administration: Professional services
- Depreciation: Kitchen equipment, furniture, renovations
- Marketing: Website maintenance, advertising, promotional materials
- Licenses: Music rights (Buma/Stemra), software, permits
💡 Example: Restaurant with €40,000 monthly revenue
Typical overhead costs per month:
- Rent: €4,500
- Insurance: €800
- Energy (fixed part): €1,200
- Phone/internet: €150
- Accountant: €400
- Depreciation: €1,500
- Marketing: €300
- Other: €650
Total: €9,500 = 23.8% of revenue
Overhead percentages by restaurant type
Your overhead percentage changes dramatically based on what kind of place you're running and where you're located:
- Fine dining (city center): 30-40% because prime locations cost serious money
- Casual dining: 25-35% falls in the standard range
- Bistro/brasserie: 20-30% usually means lower rent
- Pizzeria/snack bar: 18-28% simpler operations keep costs down
- Delivery/takeaway: 15-25% minimal service space needed
⚠️ Note:
These percentages don't include food and labor costs. Overhead above 35% makes turning a profit nearly impossible.
Rent as your biggest cost item
Rent usually gobbles up 60-70% of your total overhead expenses. The old rule still holds: rent shouldn't eat more than 15% of what you expect to bring in.
💡 Example: Rent reality check
Rent: €6,000 per month
Minimum revenue needed: €6,000 / 0.15 = €40,000
Can't hit €40,000 consistently? That location's bleeding you dry.
Energy and variable overhead
Some overhead costs move up and down with how busy you get. Energy bills include fixed stuff (your fridges never sleep) plus variable costs (more cooking during rush periods).
- Fixed energy costs: Refrigeration, lighting, standby appliances
- Variable costs: Cooking equipment, dishwashers, extra lighting
- Total energy costs: Usually runs 4-7% of revenue
Break-even calculation with overhead
Figure out break-even by adding up everything you spend:
Total costs = Food cost + Labor costs + Overhead
💡 Example: Break-even math
Monthly costs:
- Food cost: 30% of revenue
- Labor: 35% of revenue
- Overhead: €9,500 fixed
Break-even revenue: €9,500 / (100% - 30% - 35%) = €27,143
You need minimum €27,143 revenue just to break even.
Monitoring and reducing overhead
Keep tabs on overhead costs versus revenue every single month. From tracking this across dozens of restaurants, places that actually monitor monthly numbers perform way better financially than those flying blind.
- Monthly check: Add up all fixed costs and divide by revenue
- Annual review: Go through every contract and subscription
- Benchmark: Compare against similar restaurants in your area
A good P&L tracking system helps you watch how overhead percentages shift when revenue changes.
How do you calculate your overhead percentage? (step by step)
Gather all fixed monthly costs
Make a list of all costs you have every month, regardless of your revenue. Think of rent, insurance, phone, accountant, depreciation, and licenses. Add all of these up for one month.
Calculate your average monthly revenue
Take your revenue from the past 6 months and divide by 6. This gives you a realistic picture, since revenue can fluctuate month to month due to seasons or special events.
Divide overhead costs by revenue
Divide your total monthly overhead costs by your average monthly revenue and multiply by 100 to get the percentage. If this exceeds 35%, look for ways to reduce costs.
✨ Pro tip
Go through every subscription and insurance policy every 9 months - most restaurants waste €250-450 monthly on forgotten software licenses, unused services, or excessive coverage that quietly inflates overhead costs.
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 an acceptable overhead percentage for my restaurant?
Most independent restaurants run healthy operations between 25-35% overhead relative to revenue. Above 35% makes turning a profit extremely tough unless you've got exceptional margins.
Should I include VAT in my overhead calculation?
No, always exclude VAT from calculations, just like you do with food costs. Use revenue and costs excluding VAT for accurate cost structure analysis.
How often should I check my overhead percentage?
Review overhead percentages monthly during your financial reviews. If revenue changes dramatically or you sign new contracts, recalculate immediately.
What if my overhead percentage is too high?
Attack your biggest expenses first - rent and insurance usually offer the most savings potential. Energy, phone bills, software subscriptions, and marketing often hide waste. Sometimes boosting revenue works better than cutting costs.
Does depreciation of my kitchen equipment count as overhead?
Yes, equipment, furniture, and renovation depreciation definitely counts as overhead. Calculate actual monthly depreciation rather than treating big purchases as one-time hits.
How do seasonal changes affect my overhead calculations?
Fixed overhead stays the same while revenue swings with seasons, creating wild percentage swings. Use annual averages instead of panicking during slow months - those dips are normal.
📚 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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