Prime Cost Calculator
If you only track one number in your restaurant, make it prime cost. It combines your two biggest controllable expenses, food and labor, into a single percentage of sales. Enter your numbers below to see where you stand against the industry benchmark.
Why prime cost matters more than food cost alone
Food cost percentage tells you how efficiently you turn ingredients into revenue. Labor cost percentage tells you how efficiently you staff. Prime cost tells you both at once: and together those two line items typically eat 60 to 65 percent of every sales dollar in a full-service restaurant. Rent, utilities, insurance, marketing, and everything else come out of what is left, so keeping prime cost in range is the difference between a profitable month and a painful one.
Tracking prime cost weekly (not just monthly) is one of the highest-leverage habits an operator can build. A weekly check catches problems while they are still fixable: a slow week where you did not trim the schedule, a price spike from a supplier you did not notice, or portion creep on a popular dish. Most restaurant accounting software can generate the numbers, but the discipline of looking at them every Monday is what matters.
Worked example
Take a neighborhood bistro doing $32,000 in monthly sales. Its food and beverage invoices total $9,500 (29.7% food cost), and total labor including payroll taxes and benefits is $11,000 (34.4% labor cost). Prime cost = ($9,500 + $11,000) ÷ $32,000 = 64.1%. That is inside the healthy 60–65% band, but near the top: a good prompt to rebid a supplier contract or tighten the weekend schedule before it drifts higher.
Tips for keeping prime cost in the healthy zone
Work the food side first because it is usually the fastest win: standardize every recipe with exact weights, weigh proteins at the pass, renegotiate with suppliers annually, and track waste by category so you can see whether the problem is spoilage, over-portioning, or theft. On the labor side, schedule against forecasted sales instead of habit, cross-train staff so you can run leaner shifts, and watch overtime: a few hours a week at time-and-a-half adds up fast. Finally, remember that raising prices is a legitimate lever: if your prime cost is stuck at 68% and everything else is tight, a 3–4% menu price increase on your best sellers flows almost entirely to the bottom line.
Frequently asked questions
What is prime cost in a restaurant?
Prime cost is the sum of your cost of goods sold (all food and beverage ingredients) plus your total labor cost, expressed as a percentage of total sales. It captures the two largest controllable expenses in a restaurant, so it is the single most-watched number for judging day-to-day profitability.
What is a good prime cost percentage?
Most full-service restaurants aim for a prime cost of 60 to 65 percent of sales. Under 60 percent is excellent and indicates tight portion control and scheduling. Consistently over 65 percent means margins are being eaten away and you should review food costs, portioning, and staffing levels.
How do I lower my prime cost?
Lower it by working both halves: reduce food costs with standardized recipes, portion controls, supplier rebids, and waste tracking, and reduce labor costs with demand-based scheduling, cross-training, and cutting overtime. Small improvements on both sides compound quickly: a 2-point drop in food cost and a 2-point drop in labor cost is a 4-point prime cost improvement.
What is the difference between prime cost and food cost?
Food cost only measures ingredient spending against sales, while prime cost adds labor on top of that. A restaurant can have a great food cost percentage but still lose money if labor is bloated. Prime cost is the more complete measure because it covers the two biggest expenses together.