Salary negotiations challenge every restaurant owner. You want to keep good employees, but tight margins leave little room for raises. Here's how to handle this situation without risking your business.
First calculate what you can really afford
Before saying 'no', check if your numbers add up. Many restaurant owners underestimate what they actually keep from a good employee.
💡 Example calculation:
Restaurant with €40,000 monthly revenue, employee asks for €200 extra per month:
- Current net margin: 8% = €3,200
- Extra salary: €200 + €68 employer contributions = €268
- New margin: €2,932 (7.3%)
Impact: 0.7 percentage point less profit
Also check whether this employee brings you more than they cost. A skilled chef who prevents waste or works faster can earn back their extra costs.
Investigate why your margin is too tight
If you really can't spare €200 extra, the problem runs deeper. Most restaurants have unnecessary leaks:
- Food cost too high: Above 35% becomes difficult
- Food waste: 10% waste = €4,000 per month at €40k revenue
- No control over portions: 20 grams extra meat per plate = €3,000+ per year
- Outdated menu prices: Ingredients went up, prices didn't
💡 Example leak:
Your chef gives 250g steak instead of 200g:
- Extra meat per portion: 50g × €48/kg = €2.40
- At 80 portions per month: €192 wasted
- That's almost the requested salary!
Based on real restaurant P&L data, portion control issues alone account for 15-20% of profit margin problems in mid-size establishments.
Think of alternative solutions
A higher salary isn't the only way to show appreciation:
- Performance bonus: Bonus for lower food cost or less waste
- More responsibility: Sous chef title, own scheduling tasks
- Flexibility: Better working hours, extra days off
- Development: Pay for courses, learn new techniques
⚠️ Note:
A performance bonus only works if you can measure the numbers. Without control over food cost and waste, you can't give a fair bonus.
Have the conversation
Be honest about your situation. Good employees understand that a bankrupt restaurant helps no one:
- Show your numbers (revenue, costs, margin)
- Explain why more salary isn't possible right now
- Offer alternatives
- Make agreements for the future
💡 Conversation tip:
"I really value your work. Right now I can't afford an extra €200 without putting the business at risk. But if we can lower food cost by 2% together, we'll have room for a salary increase."
Plan for the future
Make concrete agreements about salary increases:
- At X% revenue growth
- If food cost comes under Y%
- After 6 months of better numbers
- Opening a second location
Put this in writing. That shows you're serious.
Sometimes letting go is better
Sometimes you have to let an employee go, no matter how good. This applies if:
- The requested salary brings your margin below 5%
- Other employees start asking for more too
- The employee isn't open to alternatives
- Your business is already running at a loss
⚠️ Note:
Training a new employee also costs money. Factor those costs into your decision: temp agency fees, training time, mistakes in the first weeks.
Get control of your numbers
This situation shows why having insight into your numbers is crucial. If you don't know where your profit is leaking away, you can't make good decisions about salaries.
With a food cost tracking system you see your food cost per dish directly and can track waste. That gives you arguments in salary negotiations and helps create real room for better compensation.
How do you handle a salary negotiation? (step by step)
Calculate the real impact
Work out what the extra salary costs including employer contributions (roughly 34% on top of gross salary). Check how much this affects your margin.
Analyze your current leaks
Check your food cost, waste and portion size. Often there's more money here than the requested salary. Measure this for a week.
Think of alternatives to money
Make a list of other ways to show appreciation: flexibility, development, more responsibility or performance bonuses.
Have the conversation honestly
Show your numbers, explain why more salary is difficult, offer alternatives and make concrete agreements for the future.
✨ Pro tip
Track your labor cost percentage weekly for 8 weeks before any salary negotiation. If it's already above 35%, you'll need to find operational savings before considering raises.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
Was this article helpful?
Frequently asked questions
How much of my revenue should go to salaries?
In hospitality, 25-35% of revenue for staff is standard. Above 40% it becomes difficult to make a profit. Count all costs: gross salary, employer contributions and any temp agency fees.
Can I give a performance bonus without a permanent contract?
Yes, but put the conditions in writing. Specify what's measured (food cost, waste, revenue) and how the bonus is calculated. That prevents disputes later.
What if my employee threatens to leave?
Stick to your numbers. Replacing a good employee also costs money, but too high a salary can break your business. Try alternatives first before giving in to pressure.
How do I know if an employee is worth their salary?
Measure concrete things: does he work faster, make fewer mistakes, prevent waste? An employee who achieves 5% less waste often earns back their extra costs.
📚 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.
Make better decisions with real numbers
Should you change your menu? Raise prices? Test a new concept? KitchenNmbrs simulates scenarios with your own data. Try it free for 14 days.
Start free trial →