TOOL 02 / 06
Prime cost calculator: food and labour, together
Prime cost adds up two of a restaurant’s costs: what the food and drink consumed cost, and what staff cost. Set against revenue excluding VAT for the same period, it shows what share of sales these two items absorb. The calculation runs in your browser, with no sign-up.
Calculate your prime cost
The formula
Prime cost = food and drink cost consumed + labour cost
Prime cost in % = prime cost ÷ revenue excl. VAT × 100
The National Restaurant Association, which describes itself as “the leading business association for the restaurant industry”, uses it for the costs of food, beverages and labour combined. It is a management indicator that you calculate yourself over a closed period.
Ingredient cost is calculated as for food cost, drinks included: opening stock, plus purchases, minus closing stock. This calculator counts in labour cost the payroll for the same period, employer contributions included, and the hours of temporary staff.
The prefilled example
| Line | Calculation | Value |
|---|---|---|
| Food and drink cost | Stocktakes and purchases | €16,000 |
| Labour cost | Payroll and contributions for the month | €15,500 |
| Prime cost | 16,000 + 15,500 | €31,500 |
| Revenue excl. VAT | POS | €50,000 |
| Prime cost in % | 31,500 ÷ 50,000 | 63.0% |
Reading the result
For a sense of scale, the National Restaurant Association, in its press release of 20 August 2025, gives a median of 65 cents per dollar of sales for these costs in limited-service restaurants in the United States. It is an American benchmark, for a given segment, not a standard: rents, wages and employer costs there are not those of France.
The most useful thing is to track your own prime cost from one period to the next, and see which of the two items has moved. If it is food, start from food cost and its gaps; if it is labour, from scheduling matched to footfall. To find out from what revenue the site covers all its costs, go to the break-even calculator.