Restaurant Finance
How do you calculate prime cost percentage?
Direct answer
Prime cost percentage equals food and beverage cost plus fully loaded labor cost, divided by total sales, multiplied by 100. Use costs and sales from the same period so the percentage is comparable week to week.
Key points
- Prime Cost % = (Cost of Goods Sold + Fully Loaded Labor) / Total Sales x 100.
- Labor should include wages, payroll taxes, benefits, and other directly attributable labor expense.
- A consistent weekly calculation is more useful than a benchmark built from mismatched periods.
What to do next
- 1Add food and beverage cost of goods sold for the period.
- 2Add wages, payroll burden, benefits, and directly attributable labor expense for that same period.
- 3Divide the combined cost by total sales and multiply by 100, then compare with your own target and prior weeks.