Restaurant Prime Cost Calculator
Prime cost is the single most watched number in restaurant management because it captures the two largest costs an operator can actually control: labor and the cost of goods sold. This calculator adds your total labor cost, meaning wages, salaries, payroll taxes and benefits, to your cost of goods sold, meaning the food and beverage you sold during the period, then expresses the combined figure as a share of your sales. Rent, utilities and insurance are largely fixed from week to week, but labor and purchasing respond directly to scheduling, portioning and waste decisions, so tracking them together focuses attention where management can make a difference. Many full-service operators aim to keep prime cost at or below roughly 60 to 65 percent of sales, but the right target depends on your concept, so the calculator simply computes your number against the sales you enter and leaves the goal to you. Use it weekly or per period to spot drift before it eats your margin. Every figure is computed deterministically from the formula shown below, with a worked example that reconciles exactly to the calculator defaults so you can confirm both the dollar prime cost and the percentage before you act on them.
Prime cost adds the two big controllable costs: prime cost = labor + cost of goods sold. Labor of $18,000.00 plus COGS of $32,000.00 is a prime cost of $50,000.00, or 62.50% of $80,000.00 in sales.
Prime cost formula
Prime cost = Labor cost + Cost of goods sold
Prime cost % = Prime cost / Total sales x 100
Labor = wages + payroll taxes + benefits
COGS = cost of food and beverage sold
Add the two big controllable costs, then divide by sales to see prime cost as a percentage. Lower is better, but compare against your own budget and concept rather than a single universal target.
Worked example
A bistro reports 18,000 in labor, 32,000 in COGS and 80,000 in sales for the month.
- Prime cost = 18,000 + 32,000 = 50,000.00
- Prime cost % = 50,000 / 80,000 = 0.625
- 0.625 x 100 = 62.50%
Prime cost is 50,000.00 dollars, or 62.50% of sales. These are the calculator's default inputs, so the result above matches the widget exactly.
Prime cost percent at 80,000 in sales
The same dollar prime cost is a different percentage as your sales change.
| Prime cost | Sales | Prime cost % |
|---|---|---|
| $44,000 | $80,000 | 55.00% |
| $48,000 | $80,000 | 60.00% |
| $50,000 | $80,000 | 62.50% |
| $52,000 | $80,000 | 65.00% |
Small-business cost and profit basics: US Securities and Exchange Commission, Investor.gov.
Restaurant prime cost calculator: frequently asked questions
What is restaurant prime cost?
Prime cost is the sum of total labor cost and cost of goods sold (COGS) for a period. Labor includes wages, salaries, payroll taxes and benefits for all staff. COGS is the cost of the food and beverage you sold. Together these are the two largest controllable costs in a restaurant, which is why operators track them as a single combined figure.
What is a good prime cost percentage?
Operators commonly aim for prime cost at or below roughly 60 to 65 percent of sales for full-service restaurants, though the target varies by concept, with quick-service and bar-led venues differing. The point is to track your own number over time and against your budget. This calculator computes prime cost as a share of the sales figure you enter so you can compare against your own goal.
Why combine labor and COGS?
Labor and COGS are the costs a manager can influence week to week through scheduling, portioning, purchasing and waste control. Rent and insurance are largely fixed. Watching prime cost as a single number focuses attention on the two levers that most affect profitability and catches problems early.
Is prime cost the same as total cost?
No. Prime cost excludes fixed and overhead costs such as rent, utilities, insurance and marketing. It is a focused measure of the two big controllable costs, not a full profit and loss statement. After prime cost you still subtract overheads to reach operating profit.
What is the prime cost formula?
Prime cost equals total labor cost plus cost of goods sold. Prime cost percent equals prime cost divided by total sales for the same period, expressed as a percentage.
Official sources
- Small-business cost, margin and profit basics: US Securities and Exchange Commission, Investor.gov. As at 25 June 2026.
Reviewed by the CalculatorHub team, edited by James Graham, 25 June 2026. See our methodology. This is general information, not financial, tax, legal or investment advice.