If food cost tells you what's happening in the kitchen, labor cost tells you what's happening everywhere else. Enter total payroll and revenue for a period and this calculator gives you the single percentage most operators watch closest, often more closely than food cost, because it moves faster and is harder to fix quickly.
Labor cost % = total payroll cost divided by total revenue, times 100.
| Total payroll cost (period) | 300000 ₹ |
| Total revenue (period) | 1200000 ₹ |
Most restaurants aim for 25-35% of revenue, luxury and full-service hotels often run higher given the service standard expected. Prime cost, food cost plus labor cost combined, is usually the more useful number to watch, with 60-65% as a common target ceiling.
Yes, include every rupee spent on people, ownership draw, management, kitchen, service and back office, so the percentage reflects the true labor load on the business, not just visible front-line staff.
Because payroll is largely fixed while revenue drops, the same salaries against smaller sales pushes the percentage up. That is the flag to look at variable staffing (part-time, split shifts) rather than assuming a hiring problem.
Work out how many waiters, kitchen staff and bussers you need for an expected number of covers, using role-specific service ratios.
Calculate total pay for a shift including overtime hours at 1.5x or 2x, for accurate payroll and staff scheduling in hotels and restaurants.
Distribute a tip or service charge pool across staff using role weights and hours worked, the points system used by well-run floors, with every share visible.
Put a rupee figure on every resignation: recruitment, training, overtime cover and the productivity ramp, then see what your annual attrition rate really costs.