Where every dollar goes before it leaves the pass.
Prime cost (food and drink cost plus total labor) is usually a restaurant’s biggest cost. Discover how payment processing fees function as an uncontrolled “shadow cost” silently shaving off 25% to 40% of bottom-line net profit.
Where Every $1.00 of Guest Revenue Goes
Proportional operating expense stack based on your operational inputs
$31,620/yr
Represents 22% as much cash as your entire annual net profit!
+5% Lift
Expands net profit margin from 14.4% to 15.2% without changing menu prices.
The Sales Equivalence Multiplier
Why cutting $1 in fee leakage beats $10 in new sales
Because restaurant net profit margins are typically only 14.4%, saving $1.00 in processing fees has the exact same profit impact as making $6.94 in new gross sales!
How to use this calculator
This calculator adds your food and labor cost into prime cost, compares it with a target for your type of restaurant, and estimates what is left after rent, running costs and card fees.
- Work out food cost: opening inventory plus purchases minus closing inventory, divided by food and drink sales.
- Work out labor cost: wages, salaries, payroll taxes and benefits, divided by sales for the same period.
- Enter both percentages. The calculator compares your total with the target for your type of restaurant.
- Repeat every month, or every week if you can, and watch the trend.
What’s a good number?
A prime cost of 60% of sales or less is the usual target; about 60–65% full-service, 55–60% quick-service.
Food cost is typically 28–35% of food sales.
Source: Restaurant365, How to Calculate Restaurant Prime Cost (2026).
Worked example
An example casual sit-down restaurant. The figures are invented; the results are what this calculator gives for them.
| Food cost | 31% |
|---|---|
| Labor cost | 30% |
| Prime cost | 61% |
|---|---|
| Our estimated target for casual dining | 62% |
| On target? | Yes |
At 61%, this example is inside the usual full-service range. Two more points on food or labor would put it over our estimate.
Common questions
What is a good prime cost?
A common target is 60% of sales or less. Full-service restaurants often run about 60–65% and quick-service about 55–60%, because table service needs more staff.
What counts as labor cost?
Hourly wages, manager and chef salaries, overtime, bonuses, the employer’s payroll taxes and benefits such as health insurance and workers’ comp. Tips paid out to staff usually stay out.
Why does the calculator show an estimated net margin?
After prime cost, it subtracts typical rent, running costs and your card fee rate to show roughly what is left. The assumptions are listed on the How we calculate page; replace them with your own figures when you have them.
Every formula and assumption is on How we calculate.
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Prime cost
65% of sales
Est. net margin
14.4%