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Restaurant Prime Cost Calculator
Food, beverage, and fully-loaded labor as a percentage of revenue. One ratio. The two biggest variable costs on the P&L in a single number you can act on. Healthy is 55–65% depending on concept (NRA). Track it weekly. Monthly is too late to fix anything.
Why this matters
If you track one number, track this one.
Food cost percentage tells you about kitchen discipline. Labor cost percentage tells you about the schedule. Prime cost tells you whether the whole machine is running. That is the only thing the bank cares about. That is the only thing a buyer looks at first.
The two ratios hide each other. A scratch kitchen with high food cost and lean labor can run the same 62% prime as a frozen-pre-portion shop with low food cost and bloated FOH. Same total, different machines. Both can be healthy. Both can fail.
Prime cost tells you something is broken. Food cost % and labor cost % tell you which one. You need all three. But you only need prime cost to know if you should be looking at all.
Weekly tracking catches problems in week two. Monthly tracking catches them in month two. The difference is real money. Six weeks of unfixed labor drift on a 60-cover restaurant is roughly $9,000 of margin (Toast). I have watched operators run the report monthly because that is what their accountant set up — and miss a four-point gap that started on a single mid-shift schedule mistake in week one. The accountant is not the problem. The cadence is the problem.
One more thing. If the owner is not pulling this number weekly, the GM is. If neither is, the number drifts and nobody finds out until tax season. That is the recurring cause of bar and kitchen drift I have watched at multiple operations: nobody owning the weekly read. The math is the easy part. Owning Monday morning is the entire game.
Prime cost benchmarks by concept type
Healthy prime cost is concept-specific. Fine dining can run higher labor against higher menu prices. QSR survives on tight food cost and lean labor. Use these as a starting target, not a hard rule.
Real scenarios
Three operators, three different prime cost stories
Same metric, different fixes. The lever depends on which component is broken — or hidden.
The 72% casual that blamed food inflation
Casual dining, 72% prime cost for two months running. Owner had already raised prices twice and was talking about a third. Convinced it was beef and chicken.
Food cost was 31%. Healthy band for the concept (Toast). Labor was 41% — schedule still sized for pre-2023 covers that never came back. Three FOH overlapped on Tuesday lunch for a 12-table service.
Cut Tuesday lunch staff from 4 to 2. Eliminated the overlapping mid-shift. Set an SPLH target by daypart and held the GM to it.
Prime cost dropped to 63% in five weeks. About $11K/month recovered. No vendor switch. No third price increase. The food was never the problem.
The 58% fast-casual nobody had to fix
Fast-casual bowl concept. Hitting 58% prime cost every week (target band 55–60% per Toast). Owner pulled the report on Monday morning, every week, for two years.
Food 28%. Labor 30%. Variance under one point most weeks. POS-integrated reporting through Toast. The discipline was the operating system, not the dashboard.
No fix. The owner used the same weekly cadence to open unit #2. Same target on day one. Hit it month two.
Both stores running 57–59% prime cost two years in. Deviations trigger a same-week investigation. The number is not a goal. It is the standard the rest of the operation reports to.
The 54% pizza shop that was actually 63%
Pizza shop, owner reporting 54% prime cost. Thought he was crushing it (NRA pizza target 55–60%). He was working 70 hours a week and not paying himself.
Add a market manager wage to the books and prime cost moves to 63%. He was subsidizing the business with his own unpaid time. The 54% was a story he was telling the bank, not a number he could hand to a buyer.
Pay himself a $52K manager salary on the books. Hire one shift lead. Reset the target to 60% with realistic labor.
On-paper prime cost moved to 61%. Real economics unchanged but now visible. He slept on Sundays for the first time in three years.
FAQ
Common questions
01 What is prime cost?
Food + beverage + fully-loaded labor, divided by revenue. That is it. The two biggest variable costs on the P&L rolled into one ratio. Healthy is 55–60% for QSR, 60–65% for casual full-service (NRA Uniform System of Accounts).
02 What is the formula?
Prime Cost = Food + Beverage + Total Labor. Prime Cost % = Prime Cost ÷ Revenue × 100. Food + bev $9,000, labor $9,000, revenue $30,000: prime cost is 60%. The math is the easy part.
03 What is a healthy prime cost?
It depends on concept (Toast, R365, NRA). QSR and fast-casual: 55–60%. Casual full-service: 60–65%. Fine dining: 60–70% — higher labor against higher menu prices. Pizza and cafe: 55–60%. Sustained above 65% for full-service is structural: pricing, food cost discipline, or schedule design.
04 Why is prime cost the metric?
Because food and labor are the only two costs you can move this week. Rent is locked. Insurance is annual. Utilities are baseline. But you can re-portion a recipe by Tuesday and you can cut a Saturday closer at 9pm. Prime cost rolls both into one number you can act on tonight.
05 How do food cost and labor cost trade off?
Negatively. Scratch kitchens push food cost up but build the kind of plates that hold higher menu prices. QSR runs the opposite way: cheap pre-portioned food, low-skilled fast labor. Both can hit the same prime cost target. Different stories, same total.
06 How often should I track it?
Weekly. Monthly is too late to fix anything (R365). Top operators track daily prime cost off POS reports. The variance between scheduled and actual is where the money lives — not the absolute number.
07 My prime cost is over 65%. Where do I cut first?
Labor. Almost always labor. Slow-shift overstaffing, schedule built for old volume, mid-shift overlap nobody pruned. Food cost moves with portion control, vendor renegotiation, recipe re-cost — those are 2–4 week fixes. Labor moves tonight at 9pm.
08 Do I include my own salary?
Yes. Owner-operators leave themselves out and report a falsely low prime cost. If you are working 50 hours a week, pay yourself a market manager salary on paper before calculating. I have watched operators run 54% prime on paper while subsidizing the business with their own unpaid 70-hour weeks. The number lies otherwise.
09 What about delivery commissions and credit card fees?
Outside prime cost. Those are variable but not COGS or labor. Track them separately as operating costs. Lumping third-party delivery into prime cost inflates the ratio against benchmarks calculated without them.
10 Does this calculator save my data?
No. Nothing is stored, transmitted, or tracked. The math runs in your browser and disappears the moment you close the tab. No signup, no email, no account.
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