A chef running a Michelin-starred restaurant once told me his prime cost hit 68% three months running before he realized his sommelier calculations were off. Prime cost combines your food cost and labor costs - your two biggest expenses. For fine dining, you want this between 55% and 65% of revenue.
What exactly is prime cost?
Prime cost has two components: food cost (all ingredients) and labor costs (wages, employer contributions, sick leave provisions). These costs scale with your revenue - more covers means higher ingredient purchases and more staff hours.
💡 Example:
Restaurant with €50,000 monthly revenue:
- Food cost: €15,000 (30%)
- Labor costs: €17,500 (35%)
Prime cost: €32,500 (65%)
Prime cost benchmarks for fine dining
Fine dining operates differently than casual restaurants. You'll carry higher labor costs due to specialized roles like sommeliers and additional service staff, but food cost percentages can run lower thanks to better margins.
- Food cost: 28-32% of revenue
- Labor costs: 30-35% of revenue
- Total prime cost: 58-65% of revenue
⚠️ Watch out:
Prime cost above 65% leaves you with less than 35% for rent, utilities, depreciation and profit. That margin gets uncomfortably thin.
Where does prime cost go wrong?
Most fine dining establishments manage food cost well but underestimate true labor expenses. This is the kind of thing you only learn after closing your first month at a loss - salary is just the starting point. You're also paying:
- Employer contributions (typically 25% on top of gross wages)
- Sick leave coverage and replacement staff
- Training programs and skill development
- Overtime premiums and holiday bonuses
💡 Example calculation of true labor costs:
Chef with €3,500 gross monthly salary:
- Gross salary: €3,500
- Employer contributions: €875 (25%)
- Holiday pay, 13th month: €350
Actual costs: €4,725 per month
Optimizing prime cost without losing quality
Fine dining doesn't allow for cheap ingredient swaps. But you've got other levers to pull for better prime cost control:
- Seasonal menus: Build dishes around peak-season pricing
- Mise-en-place planning: Reduce waste through systematic prep schedules
- Cross-training staff: Deploy team members flexibly during service rushes
- Portion control: Standardized plating prevents ingredient overuse
Tracking prime cost in practice
Many fine dining restaurants review prime cost monthly. That's too late for course corrections. Weekly tracking gives you actionable data:
💡 Weekly prime cost check:
Week with €12,500 revenue:
- Ingredient purchases: €3,750
- Paid wages: €4,375
- Prime cost: €8,125 (65%)
If this pattern holds weekly, you'll hit 65% monthly.
Food cost calculators can track your cost per dish and automatically calculate total prime cost. This gives you real-time visibility into your targets.
How do you calculate prime cost? (step by step)
Gather your food cost data
Add up all ingredient costs for a specific period (week or month). Include everything: meat, fish, vegetables, but also oil, spices and garnish. Use purchase prices, not selling prices.
Calculate your total labor costs
Add up all labor costs: gross salaries, employer contributions, holiday pay, sick leave and any temporary staff. Don't forget social contributions (average 25% on top of gross salary).
Divide by your revenue for the percentage
Prime cost = (Food cost + Labor costs) / Revenue × 100. Note: use revenue excluding VAT for a fair comparison. For fine dining, 58-65% is a healthy range.
✨ Pro tip
Track your prime cost separately for your 3 highest-revenue and 3 lowest-revenue service days each month. Low-revenue days inflate prime cost percentages since you spread fixed labor across fewer covers - this reveals if your scheduling flexibility needs work.
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
Is 60% prime cost good for fine dining?
Yes, 60% prime cost is excellent for fine dining. You'll have 40% remaining for rent, utilities, depreciation and profit. That provides room for reinvestment and healthy margins.
Should I include the owner/chef in labor costs?
If you operate as a company and draw a salary, include it in labor calculations. Sole proprietors typically exclude their own 'wage' since that represents profit. But you can estimate a market-rate salary for comparison purposes.
How often should I check prime cost?
Weekly reviews work for fine dining operations. Monthly checks come too late for meaningful adjustments. Weekly data lets you intervene quickly when you spot unfavorable trends.
What if my prime cost goes above 65%?
First verify your calculations include all labor costs and ingredient purchases. Then identify optimization opportunities: recipe adjustments, portion standardization, or more efficient scheduling. Price increases might also be necessary.
📚 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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